CNY News

China's inflation eased more than expected on falling food prices in February, while producer price inflation accelerated at the fastest pace since 2008.

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China's bank lending exceeded expectations in February, data from the People's Bank of China revealed Thursday.

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China's industrial profits grew sharply in the first two months of the year, driven by faster rise in prices of coal, steel and crude oil, data from the National Bureau of Statistics showed Monday.

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China’s money markets have experienced tightened liquidity on higher money market rates, reminiscent of the central bank-engineered liquidity crunch of 2013.

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The manufacturing sector in China continued to expand in March, and at an accelerated pace, the National Bureau of Statistics said on Friday with a manufacturing PMI score of 51.8.

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China's private sector expanded at the slowest pace in six months in March as output in both manufacturing and services weakened from February, survey data from IHS Markit showed Thursday. The Caixin composite output index fell to 52.1 in March from 52.6 in February. Nonetheless, a reading above 50 indicates expansion in the sector.

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Consumer prices in China were up 0.9 percent on year in March, the National Bureau of Statistics said on Wednesday.

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China's economy is expected to grow at a steady pace in the first quarter on government spending and robust exports. Economists expect gross domestic product to climb by 6.8 percent in the first quarter, as seen in the final three months of 2016.

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Consumer prices in China were up 1.2 percent on year in April, the National Bureau of Statistics said on Wednesday.

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After touching the bottom support trend line of the price channel on the weekly chart, USDCNH rebounded strongly from 6.7210 to 6.7918, indicating that a short term bottom had been formed.



Will the downtrend continue?

There is a bearish trend line from the May 24 high of 6.8876 to the May 31 high of 6.8351 with resistance at around 6.7940 on its 4-hour chart. As long as the pair is below the trend line, the bearish movement from the May 9 high of 6.9171 is possible to continue, and next target would be at around 6.6500. Near term support is at the 61.8% Fibonacci retracement taken from 6.7210 to 6.7918 at 6.7480, followed by 6.7210. Only break below these levels could signal resumption of the bearish movement.



On the upside, a clear break above the trend line resistance will suggest that the bearish movement from 6.9171 had completed at 6.7210 already, then further rally to test 6.8351 resistance could be seen. A break through this level will confirm that the whole correction pullback started from January 2017 high of 6.9867 is complete, this could trigger another rise towards 7.0000.

In our view

The USDCNH pair had reached the bottom of the long term bullish channel on its weekly chart and strong rebound had occurred after touching the channel support, so the correction pullback from 6.9867 might had completed at 6.7210 already. Further rally would more likely be seen in the near future.

Technical levels

Support levels: 6.7480 (Fibonacci retracement), 6.7210 (June 1 low), 6.6500.

Resistance levels: 6.7918 (June 2 high), 6.7940 (trend line resistance), 6.8351 (May 31 high), 6.9171 (May 9 high), 6.9867 (January 2017 high).