USD/CNH recovers from 6.8650, still remains choppy ahead of Fed’s monetary policy


  • USD/CNH has rebounded firmly from 6.8650 but is still inside the woods.
  • Three mid-size US banks collapsed as higher rates from the Fed deteriorated their bulked low-interest bonds in value.
  • Chinese Yuan is expected to get strengthened as retail demand is eyeing pre-pandemic levels.

The USD/CNH pair has shown a recovery move near 6.8650 in the Asian session. Despite the recovery move, the major is still inside the woods as investors are awaiting the announcement of the interest rate decision by the Federal Reserve (Fed) for fresh impetus. The asset has been oscillating in a range of 6.8650-6.8850, however, a power-pack action ahead of the Fed’s monetary policy cannot be ruled out.

S&P500 futures have delivered a two-day winning spell in times when the United States banking sector is on the cusp of further meltdown. Three mid-size commercial banks collapsed last week as higher rates from the Fed in its battle against stubborn inflation have deteriorated their bulked low-interest bonds in value. The demand for US government bonds remained weak as fresh payout for rescuing First Republic Bank could propel overall liquidity. This led to a jump in the 10-year US Treasury yields to 3.6%.

The US Dollar Index (DXY) is attempting to hold itself above 103.20, however, the downside looks favored as the context of pre-Fed anxiety looks missing. The reason might be expected less hawkish monetary policy stance from the Fed as the US inflation is meaningfully on its declining path and restoring of confidence among investors is required amid the banking sector fiasco.

Analysts at CIBC are of the view that the Fed opts for a quarter-point hike, dialing down what would have been a 50 bps move in the absence of the past week’s banking events, but likely showing a follow-up quarter-point move in the ‘dots’.

Meanwhile, the Chinese Yuan is expected to get strengthened as retail demand is eyeing pre-pandemic levels. Bloomberg reported that consumer spending is increasing again as people are planning trips, dining out, and returning to shopping malls. Still, residents of the world’s second-biggest economy aren’t splashing out like they used to but recovery seems promising.

USD/CNH

Overview
Today last price 6.8806
Today Daily Change 0.0042
Today Daily Change % 0.06
Today daily open 6.8764
 
Trends
Daily SMA20 6.9196
Daily SMA50 6.8415
Daily SMA100 6.9431
Daily SMA200 6.9294
 
Levels
Previous Daily High 6.885
Previous Daily Low 6.8648
Previous Weekly High 6.9394
Previous Weekly Low 6.8316
Previous Monthly High 6.9898
Previous Monthly Low 6.7056
Daily Fibonacci 38.2% 6.8773
Daily Fibonacci 61.8% 6.8726
Daily Pivot Point S1 6.8659
Daily Pivot Point S2 6.8553
Daily Pivot Point S3 6.8457
Daily Pivot Point R1 6.8861
Daily Pivot Point R2 6.8956
Daily Pivot Point R3 6.9063

 

 

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