#USDCNH @ 6.87962 has rebounded firmly from 6.8650 but is still inside the woods. (Pivot Orderbook analysis)

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• USD/CNH has rebounded firmly from 6.8650 but is still inside the woods.
• Three mid-size US banks collapsed as higher rates from the Fed deteriorated their bulked low-interest bonds in value.
• Chinese Yuan is expected to get strengthened as retail demand is eyeing pre-pandemic levels.

The pair currently trades last at 6.87962.

The previous day high was 6.885 while the previous day low was 6.8648. The daily 38.2% Fib levels comes at 6.8773, expected to provide support. Similarly, the daily 61.8% fib level is at 6.8726, expected to provide support.

The USD/CNH pair has shown a recovery move near 6.8650 in the Asian session. Despite the recovery move, the major is still inside the woods as investors are awaiting the announcement of the interest rate decision by the Federal Reserve (Fed) for fresh impetus. The asset has been oscillating in a range of 6.8650-6.8850, however, a power-pack action ahead of the Fed’s monetary policy cannot be ruled out.

S&P500 futures have delivered a two-day winning spell in times when the United States banking sector is on the cusp of further meltdown. Three mid-size commercial banks collapsed last week as higher rates from the Fed in its battle against stubborn inflation have deteriorated their bulked low-interest bonds in value. The demand for US government bonds remained weak as fresh payout for rescuing First Republic Bank could propel overall liquidity. This led to a jump in the 10-year US Treasury yields to 3.6%.

The US Dollar Index (DXY) is attempting to hold itself above 103.20, however, the downside looks favored as the context of pre-Fed anxiety looks missing. The reason might be expected less hawkish monetary policy stance from the Fed as the US inflation is meaningfully on its declining path and restoring of confidence among investors is required amid the banking sector fiasco.

Analysts at CIBC are of the view that the Fed opts for a quarter-point hike, dialing down what would have been a 50 bps move in the absence of the past week’s banking events, but likely showing a follow-up quarter-point move in the ‘dots’.

Meanwhile, the Chinese Yuan is expected to get strengthened as retail demand is eyeing pre-pandemic levels. Bloomberg reported that consumer spending is increasing again as people are planning trips, dining out, and returning to shopping malls. Still, residents of the world’s second-biggest economy aren’t splashing out like they used to but recovery seems promising.

Technical Levels: Supports and Resistances

USDCNH currently trading at 6.8806 at the time of writing. Pair opened at 6.8764 and is trading with a change of 0.06 % .

The pair is trading below its 20 Daily moving average @ 6.9196, above its 50 Daily moving average @ 6.8415 , below its 100 Daily moving average @ 6.9431 and below its 200 Daily moving average @ 6.9294

The previous day high was 6.885 while the previous day low was 6.8648. The daily 38.2% Fib levels comes at 6.8773, expected to provide support. Similarly, the daily 61.8% fib level is at 6.8726, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 6.8659, 6.8553, 6.8457
• Pivot resistance is noted at 6.8861, 6.8956, 6.9063

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