USD/CNH: On the back foot below 50-day EMA amid increasing trade optimism

USD/CNH fails to hold on to the bounce from six week low amid rising optimism surrounding the US-China trade deal.
PBOC’s Yuan reference rate announcement seems to have pleased sellers.
FOMC, US jobs report and month-start PMIs will be crucial to follow.

Anil Panchal FXStreet

With the increasing odds of a successful trade deal between the United States (US) and China, USD/CNH pulls back to 7.0565 amid the initial Asian session on Tuesday.

Joining the weekend’s trade-positive comments, the US President Donald Trump recently said that they are “ahead of the schedule” as far as preparations for Chile talks are concerned. Also magnifying the optimism is the announcement from the US Trade Representative’s (USTR) office that indicates additional relief to Chinese exporters.

It should also be noted that the lowest Yuan reference rate by the People’s Bank of China (PBOC) since August 26, at 7.0617 versus Monday’s 7.0762, might have recently defied the pair’s U-turn from the six week low.

The pair traders mostly ignored the recent US Dollar (USD) strength as doubts over the President's impeachment grew stronger with the House up for voting on further investigation.

Moving on, monetary policy meeting by the Federal Open Market Committee (FOMC), monthly employment data from the US and China’s month-start activity numbers, namely the Purchasing Manager Index (PMI), will be the key to follow during the week.

Technical Analysis

While a horizontal area comprising lows marked since mid-August, around 7.0300, seems to limit near-term declines of the pair, a 200-day EMA level of 6.9510 will be the next to please bears. Should prices rally beyond 50-day Exponential Moving Average (EMA) level of 7.0800 on daily closing basis, October 16 high near 7.1127 and monthly top close to 7.1700 will come back on the charts.

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.

EUR/USD keeps the bid bias just over 1.1800

EUR/USD has started the week on a positive foot, hovering around the 1.1800 region in the latter part of Monday’s session. The pair’s recovery comes on the back of a decent decline in the US Dollar, as investors keep their attention on the evolving US–EU trade relationship after President Trump’s announcement of sweeping global tariff hikes.

GBP/USD looks stuck around 1.3500 amid firm gains

GBP/USD is pushing further north on Monday, revisiting the 1.3500 hurdle and beyond. Cable’s uptick is largely being fuelled by the broader softness in the Greenback, amid lingering uncertainty around tariffs.

Gold pops above $5,200, four-week highs

Gold is holding onto its bullish tone on Monday, reaching new multi-week highs just past the $5,200 mark per troy ounce. Fresh trade-war concerns, coupled with rising geopolitical tensions in the Middle East, are keeping demand for the yellow metal well on the rise.

Crypto Today: Bitcoin, Ethereum, XRP intensify sell-off as tariff uncertainty weighs

Bitcoin, Ethereum and Ripple are trading amid increasing selling pressure at the time of writing on Monday, as investors react to fresh trade uncertainty over US President Donald Trump’s push for more tariffs.

Supreme Court nixes tariffs, Trump teases 15% global tariff

On February 20th, the Supreme Court ruled that Trump’s global tariffs under IEEPA authority were unconstitutional, effectively nullifying the framework. However, the relief was short-lived. Within hours, Trump floated a 15% blanket tariff under an alternative legal authority.

XRP recovers slightly as bearish sentiment dominates crypto market

Ripple is rising above $1.40 at the time of writing on Monday amid fresh tariff-triggered headwinds in the broader cryptocurrency market. The sell-off to $1.33, the token’s intraday low, can be attributed to macroeconomic uncertainty, geopolitical tensions and risk-averse sentiment among other factors.