#USDCNH @ 6.90047 has surpassed the crucial resistance of 6.9000 as PBoC has kept the interest rate policy stable. (Pivot Orderbook analysis)

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• USD/CNH has surpassed the crucial resistance of 6.9000 as PBoC has kept the interest rate policy stable.
• There was no urgency for the PBoC to ease policy further as the Chinese economy is well on track for economic recovery.
• The Fed is expected to raise rates by 25bps and may hold rates steady for 2023.

The pair currently trades last at 6.90047.

The previous day high was 6.9104 while the previous day low was 6.873. The daily 38.2% Fib levels comes at 6.8962, expected to provide support. Similarly, the daily 61.8% fib level is at 6.8873, expected to provide support.

The USD/CNH pair has extended its recovery above the critical resistance of 6.9000 as the People’s Bank of China (PBoC) has kept its interest rate policy unchanged. China’s central bank has kept its one-year and five-year Loan Prime Rate (LPR) stable at 3.65% and 4.30% respectively. The maintenance of a status quo by the PBoC was highly expected by the market participants.

Considering the fact that the Chinese economy is well on track for economic recovery after a prolonged lockdown period, there was no urgency of easing monetary policy further. This week, the Gross Domestic Product (GDP) released for the first quarter remained critically upbeat. In the first quarter, China’s growth rate remained in line with estimates at 2.2%. On an annual basis, the growth rate jumped by 4.5% vs. consensus of 4.0% and the former release of 2.9%.

Meanwhile, the US Dollar Index (DXY) is inside the woods amid an absence of a potential trigger this week. The USD Index is oscillating in a narrow range of 101.90-102.00 despite rising bets for one more interest rate hike from the Federal Reserve (Fed).

A Reuters poll on Fed’s interest rate guidance conveys that Fed chair Jerome Powell will deliver a final 25-basis-point interest rate increase in May and then hold rates steady for the rest of 2023. The survey also supports a short and shallow recession this year. Earlier, Citigroup also pushed its expectations for the United States recession to the fourth quarter from prior anticipation of the third quarter, citing solid performance in the economy.

Technical Levels: Supports and Resistances

USDCNH currently trading at 6.9014 at the time of writing. Pair opened at 6.895 and is trading with a change of 0.09 % .

The pair is trading above its 20 Daily moving average @ 6.8783, above its 50 Daily moving average @ 6.8893 , above its 100 Daily moving average @ 6.8815 and below its 200 Daily moving average @ 6.9479

The previous day high was 6.9104 while the previous day low was 6.873. The daily 38.2% Fib levels comes at 6.8962, expected to provide support. Similarly, the daily 61.8% fib level is at 6.8873, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 6.8752, 6.8554, 6.8378
• Pivot resistance is noted at 6.9126, 6.9302, 6.95

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