USD/CNH mildly positive around 7.1000 following China Caixin Services PMI

USD/CNH fails to cheer upbeat China data amid coronavirus resurgence risk.
ADB cuts China’s GDP forecast for 2020.
Risk-tone remains heavy, eyes US data/virus updates for fresh impulse.

Anil Panchal FXStreet

China’s better than forecast Caixin Services PMI fails to exert any downside pressure on the USD/CNH, currently up 0.20% to the intraday high near 7.1065, as markets in China open for Friday’s trading.

China’s March month Caixin Services PMI followed the footsteps of Manufacturing gauge while surging beyond prior 26.5 to 43.00.

Read: China Caixin/IHS Markit March Services PMI at 43.0 vs 26.5 in February

The reasons for the latest run-up could be traced from the Asian Development Bank’s (ADB) downbeat projection of China’s 2020 GDP growth. ADB slashes China’s 2020 GDP forecast to 2.3% vs. 5.2% previous estimate.

Also propelling the pair could be comments from Communist Party Secretary of China's Wuhan who said that the risk of coronavirus resurgence in the city is still high.

On the other hand, Washington Governor stretched stay-at-home order until May 04, 2020. Further, the global rating giant S&P held its US credit rating at AA+ with a stable outlook while also expecting the economic losses to offset in 2021.

Market’s risk-tone remains heavy as the US 10-year treasury yields fail to carry the previous day’s recovery move, currently down three basis points (bps) to 0.598%, while stocks in China marks mild losses by the press time.

Looking forward, investors will keep eyes on virus updates for fresh impulse ahead of the US session whereas in the ISM Non-Manufacturing PMI is likely to take the seat of monthly employment data. The reason could be traced from the survey dates and their proximity to the coronavirus (COVID-19) outbreak in the US.

Technical analysis

Buyers will have to justify their strength by clearing 7.1425/30 area, comprising highs marked since March 25, 2020, else a pullback to 21-day SMA level of 7.06000 can’t be ruled out.

Additional important levels

Overview
Today last price	7.1054
Today Daily Change	0.0134
Today Daily Change %	0.19%
Today daily open	7.092

Trends
Daily SMA20	7.0594
Daily SMA50	7.0169
Daily SMA100	6.9994
Daily SMA200	7.0181

Levels
Previous Daily High	7.1424
Previous Daily Low	7.0858
Previous Weekly High	7.1518
Previous Weekly Low	7.059
Previous Monthly High	7.1654
Previous Monthly Low	6.9048
Daily Fibonacci 38.2%	7.1075
Daily Fibonacci 61.8%	7.1208
Daily Pivot Point S1	7.0711
Daily Pivot Point S2	7.0502
Daily Pivot Point S3	7.0145
Daily Pivot Point R1	7.1277
Daily Pivot Point R2	7.1634
Daily Pivot Point R3	7.1843

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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