• USD/CNH drops for the sixth consecutive day, stays pressured around intraday low.
  • PBOC keeps pumping the markets, hopes of economic recovery battles IMF comments.
  • Sino-American tussles, Russia-Ukraine drama also try to stop the bears.
  • Second-tier US housing, trade numbers may entertain trades but Fed Chair Powell’s speech is the key.

USD/CNH cheers US dollar pullback to print a six-day downtrend around $6.3280 during early Wednesday.

In doing so, the Chinese currency (CNH) pair justifies the economic recovery hopes conveyed by the ex-People’s Bank of China (PBOC) official while paying a little heed to the central bank’s heavy liquidity injection.

A former member of People’s Bank of China’s (PBOC) monetary policy committee Yu Yongding said, “China's economy can grow 5.5% in 2022, and policymakers could set a higher economic growth target as long as inflation and systemic financial risks are under control.”

His comments were in contrast to the International Monetary Fund’s (IMF) downbeat economic forecasts. “We project global growth this year at 4.4%, 0.5 percentage point lower than previously forecast, mainly because of downgrades for the United States and China,” said No.2 official Gita Gopinath per Reuters.

It should be noted that the PBOC has recently cut benchmark rates and propelled ample liquidity into the markets to defend against the Fed’s rate hikes. The Chinese central bank injected 100 billion yuan on a net basis at the latest.

Elsewhere, geopolitical concerns relating to Russia’s readiness to attack Ukraine and the America COMPETES Act weigh on the market sentiment and should have helped the US Treasury yields. However, pre-Fed anxiety stops the US bond sellers from retaking controls after five consecutive days of absence.

Moving on, the Fed’s readiness to scale back easy money contrasts the PBOC’s mammoth liquidity infection and hence signals the USD/CNH rebound if the US Fed policymakers meet the hawkish expectations.

Read: Federal Reserve Interest Rate Decision Preview: Inflation, Omicron and equities

Technical analysis

An eight-month-old descending support line near $6.3238 restricts immediate USD/CNH downside amid oversold RSI conditions.

additional important levels

Today last price 6.3282
Today Daily Change -0.0036
Today Daily Change % -0.06%
Today daily open 6.3318
Daily SMA20 6.3635
Daily SMA50 6.3724
Daily SMA100 6.3995
Daily SMA200 6.4273
Previous Daily High 6.3384
Previous Daily Low 6.3288
Previous Weekly High 6.3652
Previous Weekly Low 6.3379
Previous Monthly High 6.3938
Previous Monthly Low 6.3306
Daily Fibonacci 38.2% 6.3325
Daily Fibonacci 61.8% 6.3348
Daily Pivot Point S1 6.3276
Daily Pivot Point S2 6.3234
Daily Pivot Point S3 6.3181
Daily Pivot Point R1 6.3372
Daily Pivot Point R2 6.3426
Daily Pivot Point R3 6.3468



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