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US Dollar Ready to Resume Rise Against the Chinese Yuan?Following a few months of consolidation, the US Dollar seems to be making some upside progress against the Chinese Yuan. Fundamentally speaking, a hawkish Federal Reserve and dovish People's Bank of China offer upside potential for USD/CNH. This also follows measures from China's government (about 1 trillion Yuan) to bolster the economy. In response, USD/CNH is trying to confirm a breakout above the May high (6.8376). Key resistance seems to be the midpoint of the Fibonacci extension (6.8833). Further gains place the focus on the 61.8% and 78.6% levels at 6.9460 and 7.0353 respectively. Keep a close eye on the 20- and 50-day Simple Moving Averages (SMAs). These could reinstate the upside focus in the event of a turn lower. FX_IDC:USDCNH
Long
by QM_Dubrovsky
USDCNH 11th JULY 2022Apart from the very aggressive increase in interest rates by the US central bank (The Fed), the recession issue has also made the US dollar a safe-haven choice. The Fed until last June has raised interest rates 3 times with a total of 150 basis points to 1.5% - 1.75%. This month, the world's most powerful central bank will again increase by 50 - 75 basis points, and by the end of the year interest rates are projected to be in the range of 3.25% - 3.5%. This certainly supports the strengthening of the US dollar. USD is predicted to continue to strengthen for at least the next 3 months.
Long
by DNP-FX
2
USD/CNH Falling Wedge May Hint at Uptrend ResumptionThe US Dollar has been rising against the Chinese Yuan in June so far. On the 4-hour chart, USD/CNH appears to be carving out a bullish Falling Wedge chart formation. A breakout above, with resistance as the 23.6% Fibonacci extension at 6.7304, opens the door to perhaps revisiting the May high at 6.8375. Otherwise, a turn back lower towards 6.6131 would keep the Yuan on a slow and steady appreciation course against the US Dollar within the boundaries of the Falling Wedge. FX_IDC:USDCNH
Long
by QM_Dubrovsky
EURO USD : RETEST OF CHANNEL RESISTANCE THEN BREAK TARGET $1.65EURO USD is looking pretty good on the MACRO. A break of the channel was attempted but failed. I believe a retest of the rising trend-line within the channel is possible without a break below but if it breaks below we may retes the bottom of the channel support before moving up and breaking out of the channel. I dont think that is what will happen because the MACD has a fresh curl up, RSI is curling up it looks like a move up is incoming. This is not trading financial advice this is just my opinion. Thank you.
Long
by Bitgolder
USDCNY 31st MAY 2022Asian shares erased early losses in Tuesday afternoon trade, as signs that China's economic pain may be gradually easing amid the easing of COVID-19 restrictions overshadowed broader investor concerns about a global inflation shock. Also lifting sentiment in the Asian region were details of Beijing's new policy support, which includes cash grants to hire fresh graduates and support for internet companies that list overseas. China's official PMI for May showed factory activity continued to decline but at a slower pace than in April. USDCNH APRIL 2022 USDCNH MARCH 2022
Long
by DNP-FX
Chinese yuan rebounds on Shanghai reopening hopesThe Chinese yuan rose to one-week highs on Monday, fueled by expectations that Shanghai, the country’s financial hub, will soon emerge from a two-month lockdown that has crippled economic activities in the city and weighed on the country’s overall economic recovery. The CNY traded at 0.1504 against the greenback on Monday, recovering further from an over one-week low of 0.1481 on Wednesday when the yuan weakened against a basket of 24 currencies tracked by the China Foreign Exchange Trade System (CFETS). Still, the yuan has fallen below the 0.1570-mark against the USD since April as concerns over China’s economic recovery grew following Shanghai’s prolonged lockdown that has affected consumption, industrial production, lending, foreign trade, and other aspects of the economy. The RSI indicator is at least suggesting that this recovery in the yuan may not last. Slowing economy China’s zero COVID-19 policy has definitely taken a toll on the domestic economy. In April, China’s retail sales fell at the sharpest pace in over two years as the lockdowns in Shanghai hammered consumption and the supply of retail goods. There have been reports of food shortage in Shanghai, with state-run Xinhua News reporting that multiple botanists called on residents to stop digging and consuming wild vegetables. Industrial output, meanwhile, unexpectedly fell in April versus a year earlier, reversing the modest gain in March. The drop in China’s factory output last month was the steepest since the height of the COVID-19 pandemic in February 2020. It came as lockdowns forced the closure of vital factories including those operated by local and domestic carmakers. Shanghai is one of China’s major auto production hubs and the lockdowns weighed on carmakers’ revenues in April. All-out effort to stimulate economy As investment banks and economists downgraded their outlook on the Chinese economy this year due to the lockdown’s impact, Beijing has vowed to all-out efforts to stabilize industrial and supply chains and boost infrastructure construction. On Friday, Chinese Premier Li Keqiang acknowledged that the country’s latest economic challenges are worse than those seen in 2020. Li said the government is "at a critical juncture in determining the economic trend of the whole year.” He urged local governments to make every effort in bringing the economy back to its normal track. Shanghai reopening The Shanghai government is working to ease the city’s lockdown, issuing on Sunday an action plan that consists of 50 policies and measures to help stimulate the economy. The measures include relaxing the rules on resuming production starting June 1 and expanding the scope of subsidies for companies’ pandemic prevention and disinfection, state-run Xinhua News reported Sunday.
by BlackBull_Markets
USD/CNH May Resume Broader Uptrend as China Faces Growth WoesThe US Dollar may regain its footing against the Chinese Yuan amid favorable fundamental headwinds. China's zero-Covid policy has been weighing on local economic output. Meanwhile, rising fears of a recession in the US are slowly weakening global growth expectations. This leaves China in a tricky spot, even if conditions open up locally. A slowing global economy could sap the demand for Chinese goods. Diverging monetary policy is also favoring the US Dollar against the Chinese currency. On the daily chart, USD/CNH has left behind a bullish Morning Star candlestick pattern. Further upside follow-through could open the door to further gains. That would place the focus on the May high at 6.8376. Otherwise, clearing immediate support at 6.6480 exposes the Mat low at 6.6119 as the 50-day Simple Moving Average nears.
by QM_Dubrovsky
Dollar - DX DXY DOLLAR WEF Summit in DAVOS Began today, May 22, 2022. World Economic Forum members are face to face \as opposed to Virtual. Topics include Ukraine, Energy, Nato, and Climate. Government Policies will be shaped this weekend for the next 18 months. Volatility & Stability will be addressed with strategy sessions will be addressed in breakout groups to present a composite solution. This meeting has been postponed as it is usually held in January. Acceleration of Policies and Agenda are to be anticipated. The result will have broad-reaching Market implications.
ICEUS:DX1!
by HK_L61
2
DXY Wyckoff distributionHere we go ladies and gentleman, after calling the bottom and an unprecedented run up in the dollar we have a top for now. (tested the 2016 highs) This went a little over my initial projection though we can see that its finally confirmed (i think about 80%) that this is indeed the end of a great dollar era. as far as the impact on equities I think that we could have a crazy blow off top rally with interest rates still needing to go higher to tame inflation and not much that the fed can do to pivot to tackle that. Bonds are done for now. commodities can still go higher. Oil is still going to go much higher because of demand even though there is a slight trembling in the economic conditions. J pow can continue to raise rates because there is still somewhat of a strong economic backdrop and will not raise unemployment by raising rates. only time will tell, That's all folks
TVC:DXY
by moonman777
The Beginning of the Golden Dragons Collapse?China is struggling, Covid 3.0 or whatever version we are on now is taking a hold of the Chinese, Shanghai in lockdowns and Shipments struggling to dock. The Chinese Economy is in a very interesting position currently, with Companies like the Chinese Titanic 'Evergrande' defaulting. We are seeing China try to expand its influence in the SCS ( South China Sea). When we take a look at the currency pair USDCNH, we are seeing the USD start to gain some real ground and this weekly charts shows the potential for this rally to continue to the 7 area, we can look for a retest of volume before opening potential long positions.
Long
by ZenFlo
USDCNH: Yuan, Yuan, YuanAnalysts have been asking if China will allow the Yuan to weaken for ages, and now it's starting, everyone's gone quiet... Why is China's currency weakening now? One explanation is yield differentials. Once upon a time, you could invest in Chinese bonds and earn a lovely premium vs US yields for doing so. That isn't the case now 👇 Chinese yields have gradually fallen, while US yields have risen sharply: Now, this could all wash out. Dollar strength is being driven by the Federal Reserve's hawkish tones and high inflation in the US. Bostic is already worrying about global growth and talking up the need to be "cautious". If some of the 2022 Fed voters start to talk up those same concerns, maybe the markets begin to scale back those hike expectations, and weaken the dollar. But that's only one side of the equation... Back in 2015, the PBoC devalued the Yuan by 3%. Which if you look at it on the chart wasn't that big a deal... It was a controversial decision however... The move was unexpected , and many believed it was a desperate attempt by China to boost exports in support of an economy that was growing at its slowest rate in decades. However, the PBOC claimed that the devaluation was part of its reforms to move toward a more market-oriented economy. The sudden shift sent a signal, and the yuan hasn't revisited the 6.20 level since. And things don't really look too different now. China's economy is slowing, while global growth/demand is slowing too. And for all the big promises of "common prosperity" or boosting domestic demand, nothing has really changed. Back in August 2019, growth concerns were front and centre. The yuan was far weaker than it is now, trading above 7 per dollar. A weaker yuan was seen as a positive development for the Chinese economy by making their products cheaper for foreign buyers. It might not be so abrupt, but there are plenty of reasons for the Chinese authorities not to push back too vigorously against a weaker Yuan.
Long
by FinkPro
US Dollar Pressuring Yuan as USD/CNH Breaks Year-Long TrendlineThe US Dollar is making a move against the Chinese Yuan after months of consolidation. USD/CNH took out a year-long falling trendline, as well as the 6.3941 - 6.4107 resistance zone. This marks the highest close since October. Further upside confirmation could perhaps hint at a turning point for the almost 2-year long downtrend. A bullish crossover between the 20- and 50-day Simple Moving Averages (SMAs) remains in play. These lines could come into play in the event prices turn lower, holding as key support. The breakout has exposed the September high at 6.4880. Negative RSI divergence does show that upside momentum is fading, so keep an eye on the trendline. The latter could hold as new support in the event of a turn lower. FX_IDC:USDCNH
Long
by QM_Dubrovsky
How China’s zero-COVID policy is taking a toll on its economyThe more contagious omicron strain of COVID-19 is testing China’s zero-tolerance COVID-19 policy and while many signs underscore the strategy’s adverse impact on the country’s economic recovery, Beijing continues to stick to it, dismissing suggestions that China should learn to live with the virus as other nations do. Lockdowns in Shenzhen and Shanghai The resurgence of COVID-19 cases in Shenzhen, dubbed as China’s Silicon Valley, prompted authorities to impose a week-long lockdown of its 17.5 million residents in March. The curbs forced the closure of some factories including those of Apple (NASDAQ:AAPL) supplier Foxconn (TW:2317) and carmakers Toyota Motor (NYSE:TM) and Volkswagen (FRA:VOW). Shenzhen is also home to tech giants including Tencent (HKG:0700) and Huawei Technologies. While JP Morgan analysts do not expect the Shenzhen lockdown to have a big impact on iPhone production, some economists have delivered a grim warning on the lockdown in Shanghai. Authorities in China’s financial hub last week extended the lockdown of 26 million people as the city launched its largest public health response in the COVID-19 pandemic era. ING Bank’s Greater China chief economist Iris Pang warned that the cost of the lockdown in Shanghai and in other areas in China will have a “huge” cost to the country’s growth. Shanghai is tipped to suffer a 6% GDP loss if the lockdown persists in April, leading to a 2% GDP loss for the whole of China. The lockdown in Shanghai also affected the production of some known brands including Tesla (NASDAQ:TSLA), German auto parts giant Bosch, and Taiwan’s Pegatron (TW:4938), another iPhone assembler. Offshore Yuan and China H-shares After trending downward for the previous 7 months, news of the extreme lockdowns prompted the USDCNH to break upwards and out of its channel. The USDCNH, at this point, doesn’t have a clear path back to its previous territory. Conversely, the China H-shares index saw a reversal of fortune on March 16. The China H-shares index follows Chinese incorporated companies which are traded on exchanges outside the country. The boost may have come from investors realising that China would be unlikely to face sanction from the US after failing to condemn the Russian invasion of Ukraine more forcibly in the beginning. GDP slowdown The latest developments in China are widely expected to take a toll on the economy that is already battered by the slowdown in the real estate sector and other downward risks. Everbright Securities recently warned that Beijing’s move to cling to its zero-COVID strategy could knock 10 percentage points out of China’s GDP on a quarterly basis in the first quarter. Natixis, meanwhile, expects the lockdowns and transport restrictions to slash 1.8 percentage points from China’s first-quarter GDP. Julian Evans-Pritchard, senior China economist at Capital Economics, in late March warned that "the economy is in the midst of its most abrupt downturn since early 2020.” China is set to release its quarterly GDP data on Monday, April 18.
C
by BlackBull_Markets
How China’s zero-COVID policy is taking a toll on its economyThe more contagious omicron strain of COVID-19 is testing China’s zero-tolerance COVID-19 policy and while many signs underscore the strategy’s adverse impact on the country’s economic recovery, Beijing continues to stick to it, dismissing suggestions that China should learn to live with the virus as other nations do. Lockdowns in Shenzhen and Shanghai The resurgence of COVID-19 cases in Shenzhen, dubbed as China’s Silicon Valley, prompted authorities to impose a week-long lockdown of its 17.5 million residents in March. The curbs forced the closure of some factories including those of Apple (NASDAQ:AAPL) supplier Foxconn (TW:2317) and carmakers Toyota Motor (NYSE:TM) and Volkswagen (FRA:VOW). Shenzhen is also home to tech giants including Tencent (HKG:0700) and Huawei Technologies. While JP Morgan analysts do not expect the Shenzhen lockdown to have a big impact on iPhone production, some economists have delivered a grim warning on the lockdown in Shanghai. Authorities in China’s financial hub last week extended the lockdown of 26 million people as the city launched its largest public health response in the COVID-19 pandemic era. ING Bank’s Greater China chief economist Iris Pang warned that the cost of the lockdown in Shanghai and in other areas in China will have a “huge” cost to the country’s growth. Shanghai is tipped to suffer a 6% GDP loss if the lockdown persists in April, leading to a 2% GDP loss for the whole of China. The lockdown in Shanghai also affected the production of some known brands including Tesla (NASDAQ:TSLA), German auto parts giant Bosch, and Taiwan’s Pegatron (TW:4938), another iPhone assembler. Offshore Yuan and China H-shares After trending downward for the previous 7 months, news of the extreme lockdowns prompted the USDCNH to break upwards and out of its channel. The USDCNH, at this point, doesn’t have a clear path back to its previous territory. Conversely, the China H-shares index saw a reversal of fortune on March 16. The China H-shares index follows Chinese incorporated companies which are traded on exchanges outside the country. The boost may have come from investors realising that China would be unlikely to face sanction from the US after failing to condemn the Russian invasion of Ukraine more forcibly in the beginning. GDP slowdown The latest developments in China are widely expected to take a toll on the economy that is already battered by the slowdown in the real estate sector and other downward risks. Everbright Securities recently warned that Beijing’s move to cling to its zero-COVID strategy could knock 10 percentage points out of China’s GDP on a quarterly basis in the first quarter. Natixis, meanwhile, expects the lockdowns and transport restrictions to slash 1.8 percentage points from China’s first-quarter GDP. Julian Evans-Pritchard, senior China economist at Capital Economics, in late March warned that "the economy is in the midst of its most abrupt downturn since early 2020.” China is set to release its quarterly GDP data on Monday, April 18.
by BlackBull_Markets