#USDCNH @ 6.75582 has shown a V-shape recovery from 6.7480 amid a recovery in the USD Index. (Pivot Orderbook analysis)

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• USD/CNH has shown a V-shape recovery from 6.7480 amid a recovery in the USD Index.
• Caixin Manufacturing PMI has landed at 49.2 lower than the expectations of 49.5.
• The risk-perceived assets are facing the heat amid soaring anxiety ahead of the Fed’s monetary policy.

The pair currently trades last at 6.75582.

The previous day high was 6.767 while the previous day low was 6.7486. The daily 38.2% Fib levels comes at 6.7556, expected to provide support. Similarly, the daily 61.8% fib level is at 6.76, expected to provide resistance.

The USD/CNH pair has shown sheer volatility after the IHS Markit reported a lower-than-anticipated Caixin Manufacturing PMI data. The asset dropped to near 6.7480 but found a stellar buying interest and demonstrated a V-shape recovery above 6.7540. The economic data has landed at 49.2 lower than the expectations of 49.5 but higher than the former release of 49.0.

The street was expecting a better-than-expected performance after getting positive cues from China’s official Manufacturing PMI data. The official Manufacturing PMI released by China’s National Bureau of Statistics (NBS) landed at 50.1, higher than the consensus of 49.7 and the prior figure of 47.0.

It is worth noting that Chinese households remained busy in January’s last week for Lunar New Year celebrations, therefore, firms didn’t operate at full capacity. In spite of that, the Chinese economy maintained resilience in its production activities.

Meanwhile, the US Dollar Index (DXY) has extended its recovery above the immediate resistance of 101.75 as anxiety among investors is soaring ahead of the interest rate decision by the Federal Reserve (Fed). Also, investors are turning risk averse and therefore dumping the risk-perceived assets like S&P500 futures, which have extended their downside. The return generated by 10-year US Treasury bonds has dropped to 3.50% on expectations that Fed chair Jerome Powell will announce a smaller interest rate hike.

As per the CME FedWatch tool, the chances of a 25 basis point (bps) interest rate hike announcement by the Fed are more than 99%.

Technical Levels: Supports and Resistances

USDCNH currently trading at 6.7522 at the time of writing. Pair opened at 6.7548 and is trading with a change of -0.04 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 6.7786, 50 SMA 6.9199, 100 SMA @ 7.042 and 200 SMA @ 6.8998.

The previous day high was 6.767 while the previous day low was 6.7486. The daily 38.2% Fib levels comes at 6.7556, expected to provide support. Similarly, the daily 61.8% fib level is at 6.76, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 6.7467, 6.7385, 6.7284
• Pivot resistance is noted at 6.765, 6.7751, 6.7833

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