Chinese Economy Growing Steadily
|Q1 was overall good for China, although not in each and every aspect. The Chinese GDP rose by 6.8% YoY between Jan and Mar, quite in line with the expectations. This is the same rate as in Q4 2017.
Meanwhile, manufacturing production declined compared to the previous value, rising only by 6% against 7.2%, and even against the forecast at 6.4%. Retail sales jumped by 10.1% YoY, heavily beating the expectations. Investments were rising by 7.5% YoY, a bit short of the previous December value at 7.9% and failing to meet expectations.
The overall fundamental outlook shows that Chinese economy has at least some room for growth, while according to some signals a slowdown may occur moving forward. Some positive things includes Xi Jinping's ecology and wellbeing program, as well as the rising global demand, but, as we head into the end of the year, some negative circumstances may appear as well.
The US trade war is something the investors might become wary of, while the macroeconomics show some signs of the infrastructure and real estate activity decline. Still, the economy being stable and steady is the most important thing for the yuan now.
Technically, the USDCNH is downtrending, while the price is slow at making new lows, which means the momentum is fading out. The current target of this downtrend is the support 6.2185. In the short term, the latest internal uptrend stopped without reaching its target at the resistance. Currently, the market is heading lower, and the short term downtrend is testing the resistance for the third time. This, in its turn, may lead to the price moving to the projection channel and aiming for 6.3030. On the other hand, if the ascending trend gains momentum, the major projection channel resistance may get broken out, with the price reaching 6.3435.
Disclaimer
Any forecasts contained herein are based on the authors' particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
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