USD/CNH prints five-day uptrend around 6.3800 as coronavirua, PBOC chatters battle strong yields

USD/CNH takes the bids to refresh weekly high, up for the fifth consecutive day.
China’s Tangshan witnesses virus-led lockdown, local media signals PBOC’s RRR, LPR cuts.
Headlines concerning Ukraine-Russia also recently highlighted China due to its alleged ties with Russia, making them key to observe.
US Treasury yields remain firmer at three-year high as Fedspeak hints at aggression in rate hikes, Powell’s speech eyed.

Anil Panchal FXStreet

USD/CNH extends the four-day advances to $6.3800 during Wednesday’s Asian session while poking the weekly high of late.

The Chinese offshore currency (CNH) pair’s latest gains could be linked to the broad US dollar rebound tracking the firmer Treasury yields, as well as likely hardships for the dragon nation due to the COVID-19 resurgence and ties with Russia.

That said, the US 10-year Treasury yields renew the highest levels since May 2019, around 2.41% at the latest, whereas S&P 500 Futures and stocks in China portray traders’ indecision.

A steady increase in China’s daily covid infections, recently by 2,469 versus 2,432 prior, joins the news of a virus-led lockdown in Tangshan to weigh on the market sentiment. On the same line were chatters surrounding the faster spread of a new coronavirus variant called BA2 in Europe. Additionally favoring the USD/CNH bulls are chatters that the People’s Bank of China (PBOC) will announce rate cuts during the year, per multiple China media outlets. Furthermore, the North Atlantic Treaty Organization (NATO) leaders’ concern over China-Russia ties also exerts downside pressure on the CNH.

Alternatively, hopes that the global policymakers will overcome the reflation woes and will revert to normal rates following the likely upheaval seem to challenge the USD/CNH bulls of late.

That said, today’s speech from Fed Chairman Jerome Powell will be crucial amid firmer yields and can drive USD/CNH further towards the north on repeating the early-week hawkish comments. Also important will be second-tier US data and Ukraine-Russia headlines.

Technical analysis

USD/CNH’s sustained recovery from the 100-DMA, around 6.3640, allows buyers to again aim for the 200-DMA hurdle of $6.4100.

Additional important levels

Overview
Today last price	6.377
Today Daily Change	0.0004
Today Daily Change %	0.01%
Today daily open	6.3766

Trends
Daily SMA20	6.3412
Daily SMA50	6.3475
Daily SMA100	6.3641
Daily SMA200	6.4108

Levels
Previous Daily High	6.3783
Previous Daily Low	6.3694
Previous Weekly High	6.4108
Previous Weekly Low	6.3528
Previous Monthly High	6.3774
Previous Monthly Low	6.306
Daily Fibonacci 38.2%	6.3749
Daily Fibonacci 61.8%	6.3728
Daily Pivot Point S1	6.3713
Daily Pivot Point S2	6.366
Daily Pivot Point S3	6.3625
Daily Pivot Point R1	6.3801
Daily Pivot Point R2	6.3836
Daily Pivot Point R3	6.3889

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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