USD/CNH Still Capped by Bearish Trend Line

While further exchanges of actions and rhetoric between the two biggest economies in the world are expected, the U.S. dollar is weakening against the Chinese yuan...

Trade War (2)

Those heightened tensions between the U.S. and China give no signs of softening in the near future.

In response to China imposing a controversial national security law on Hong Kong, U.S. President Donald Trump announced on Friday that his government will end Hong Kong's preferential trade status.

Trump also said sanctions would be imposed on Chinese and Hong Kong officials involved in eroding the city's autonomy.

Then, on Monday China reportedly ordered state-owned agencies to halt purchases of U.S. agriculture products putting the first phase trade deal with the U.S. in jeopardy.  

While further exchanges of actions and rhetoric between the two biggest economies in the world are expected, the U.S. dollar is weakening against the Chinese yuan. 

On an Intraday 30-minute Chart, USD/CNH (CNH means Chinese Yuan in the offshore market) marked on May 27 a recent high of 7.1964, which was last seen in September 2019.


Source: GAIN Capital, TradingView

In fact, the declining trend line drawn from that high on May 27 remains intact.

A return to the Immediate Support at 7.1205 (a low seen this morning) would expose the Next Support at 7.1045 (a key support level seen in May).

Only a clear break above the Overhead Key Resistance at 7.1380 would bring about a bullish reversal for the greenback against the yuan. 


More from CNH

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.