USD/CNH pops to one-week high of 6.9375

US FOMC minutes reaffirmed Fed's hiking bias, putting a bid under the US dollar.
USD/CNH jumped to a one-week high of 6.9375, validating the bullish chart bias.

Omkar Godbole FXStreet Contributor

Currently, the USD/CNH pair is trading at 6.9348, having clocked a seven-day high of 6.9375 earlier today.

The bid tone around the greenback picked up a bid in the overnight trade after the minutes of the Federal Reserve's September meeting showed that a "few" officials thought the policy would have to remain “modestly restricted for a time” while an additional “number” thought the policy would need to be restrictive only “temporarily.”

Moreover, many in the markets were expecting the central bank to dial down its hawkish tone in response to President Trump's criticism of the Fed's policy tightening.

Further, the US treasury refrained from naming calling China a currency manipulator, as it found Beijing to be doing little to directly intervene in the currency's value. Joseph Trevisani, Senior Analyst at FXStreet, says China cannot be labeled as FX manipulator as the standard was written by Congress, "persistent, one-sided" intervention in the exchange market and Beijing is not guilty.

the PBOC fixed CNY midpoint 32 pips weaker than Reuter's estimate, adding to the bearish pressure around the Chinese currency.

Looking forward, the path of least resistance is on the higher side, as indicated by the ascending 5-day and 10-day exponential moving averages (EMAs).

Read: Who is Manipulating China?

USD/CNY Technical Levels

Resistance: 6.9430 (Oct. 11 high), 6.9584 (yearly high), 7.00 (psychological hurdle)

Support: 6.9136 (10-day EMA), 6.8668 (Oct. 11 low), 6.8241 (Sept. 21 low)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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