2020-10-15 • Updated
USD/CNH has been steadily dipping, but downbeat China’s PPI and CPI limit the further falling.
Chinese Producer and Consumer Price Indices came out worse than analysts anticipated: CPI rose by 1.7% vs. the forecast of 1.9%, whereas PPI contracted by 2.1% vs. the -1.9% expected.
The People’s Bank of China (PBoC) is unsatisfied with too much appreciated CNH as it makes China’s exports more expensive for buyers. In fact, China has been the world's largest exporter of goods since 2009. Why? Their products are simply cheaper, that’ why it’s crucial for China not to lose this advantage.
The PBoC changed the rules, making it cheaper for traders to bet against the yuan. According to Reuters, the bank claimed it “would lower to 0 from 20% the reserve requirement ratio for financial organizations when conducting some foreign exchange forwards trading”. By the way, analysts said that the PBOC tried the same move in 2017 and it didn’t help to stop the appreciation of the yuan.
The negative inflation data weighed on the Chinese yuan, and PBoC’s actions added headwinds to it. Besides, the pair is rising due to the high demand for the USD amid the risk-off sentiment.
According to United Overseas Bank, USD/CNH will keep falling in the long-term and will reach 6.60 by the middle of next year.
USD/CNH has been trading in a descending channel since late May. It may jump to the resistance of 6.7625, but the pair isn’t likely to break the upper trendline. We can expect it to bounce off this level and drop to the recent low of 6.6850, clearing the way towards the next support of 6.6500.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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