The USDCNH pair has fallen to its lowest level in over a week and continues to be under pressure, remaining close to the lowest point it reached during the day.
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- USD/CNH drops to more than one-week low, stays pressured near intraday bottom of late.
The pair currently trades last at 7.16260.
The previous day high was 7.2134 while the previous day low was 7.1788. The daily 38.2% Fib levels comes at 7.1921, expected to provide resistance. Similarly, the daily 61.8% fib level is at 7.2002, expected to provide resistance.
USD/CNH stands on the slippery ground as it drops to the lowest levels in seven days to around 7.1500 during early Tuesday, close to 7.1600 by the press time. In doing so, the offshore Chinese Yuan (CNH) justifies the People’s Bank of China’s (PBoC) efforts to defend the domestic currency, as well as cheer the talks about more stimulus from the dragon nation.
The PBoC marked another disappointment for the USD/CNY forecasters by fixing the reference rate at 7.1406 versus 7.1451 prior and 7.1860 market forecasts. It’s worth noting that the USD/CNY closed near 7.1882 the previous day. While defending the USD/CNY fix, the Chinese central bank announced a 3-month bills swap worth five billion Yuan while marking a net 29 billion Yuan injection by the Open Market Operations (OMOs).
Elsewhere, the Chinese media conveyed details of the Communist Party’s Politburo meeting on Monday that cited new difficulties and challenges for the economy while also showing the policymakers’ readiness for prudent monetary and fiscal policies. It’s worth observing, however, that the policymakers pledged measures to step up support for the economy amid a flagging post-COVID recovery, reported Reuters.
On the same line, China state planner National Development and Reform Commission (NDRC) issued a notice to promote the high-quality development of private investment. That said, NDRC also pledged encouragement of participation in some projects of transport, water and clean energy, as well as in new infrastructure and modern agriculture.
Amid these plays, stocks in China rally but the US stock futures print mild losses while the Treasury bond yields dribble and trigger the US Dollar’s retreat.
That said, the US Dollar Index (DXY) refreshed a two-week high near 101.40 during a five-day uptrend, mildly bid near 101.45 by the press time, amid comparatively better PMI data and upbeat yields. That said, the first readings of the US S&P Global Manufacturing PMI for July improved to 49.0 from 46.3 prior and 46.4 market forecasts while the Services PMI eased to 52.4 versus 54.0 expected and 54.4 previous readings. With this, the Composite PMI edged lower to 52.0 from 53.2 prior and 53.1 market forecasts. However, Chicago Fed National Activity Index for June slid to -0.32 from -0.28 prior (revised) and 0.03 market forecasts.
Moving on, China stimulus news and the PBoC efforts may keep weighing on the USD/CNH price but the US CB Consumer Confidence for July, expected at 112.1 versus 109.70 prior, and Wednesday’s Federal Open Market Committee (FOMC) monetary policy meeting announcements are crucial to watch for clear directions.
A convergence of the five-week-old ascending trend line joins the 50-DMA to restrict the immediate USD/CNH downside near 7.1600.
Technical Levels: Supports and Resistances
USDCNH currently trading at 7.1626 at the time of writing. Pair opened at 7.1856 and is trading with a change of -0.32% % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 7.1626 |
| 1 | Today Daily Change | -0.0230 |
| 2 | Today Daily Change % | -0.32% |
| 3 | Today daily open | 7.1856 |
The pair is trading below its 20 Daily moving average @ 7.215, above its 50 Daily moving average @ 7.1566 , above its 100 Daily moving average @ 7.0305 and above its 200 Daily moving average @ 7.0065
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 7.2150 |
| 1 | Daily SMA50 | 7.1566 |
| 2 | Daily SMA100 | 7.0305 |
| 3 | Daily SMA200 | 7.0065 |
The previous day high was 7.2134 while the previous day low was 7.1788. The daily 38.2% Fib levels comes at 7.1921, expected to provide resistance. Similarly, the daily 61.8% fib level is at 7.2002, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 7.1718, 7.158, 7.1372
- Pivot resistance is noted at 7.2064, 7.2272, 7.241
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 7.2134 |
| Previous Daily Low | 7.1788 |
| Previous Weekly High | 7.2368 |
| Previous Weekly Low | 7.1484 |
| Previous Monthly High | 7.2856 |
| Previous Monthly Low | 7.0668 |
| Daily Fibonacci 38.2% | 7.1921 |
| Daily Fibonacci 61.8% | 7.2002 |
| Daily Pivot Point S1 | 7.1718 |
| Daily Pivot Point S2 | 7.1580 |
| Daily Pivot Point S3 | 7.1372 |
| Daily Pivot Point R1 | 7.2064 |
| Daily Pivot Point R2 | 7.2272 |
| Daily Pivot Point R3 | 7.2410 |
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