USD/CNH refreshes 18-month low after upbeat China Caixin Services PMI

USD/CNH remains on the back foot around 6.7100, down 0.42% intraday, during the early Friday's trading. The pair recently paid a little heed to the September month’s Caixin Services PMI data as it bounced off the intraday low after the upbeat releases to 54.8.

Read: China's Caixin 54.8 vs 54.0 in August, recovery extends

Other than the Chinese data, Beijing’s success in joining the World Health Organization’s (WHO) coronavirus (COVID-19) vaccine program, despite global ire, offers additional strength to the Chinese currency. Furthermore, stocks in China are also cheering the current market optimism, backed by stimulus hopes, after returning to bourses following the Golden Week holidays and help the USD/CNH bears as well.

The global market mood cheers US President Donald Trump’s another shift, as far as the COVID-19 aid package is concerned. After initially rejecting the large-scale help, the Republican leader is said to consider big fiscal support, per the Bloomberg. Also favoring the markets could be Trump’s health recovery and readiness to take out a rally before Saturday, as per his comments on the latest Fox interview.

Amid all these plays, S&P 500 Futures gain around half a percent whereas stocks in Asia-Pacific and the US 10-year Treasury yields are also portraying the market optimism.

Looking forward, traders will keep eyes on the stimulus headlines for fresh impetus. Vaccine news and US-China trade updates may also entertain the USD/CNH players.

Technical analysis

A three-week-old falling trend line around 6.7030 may offer immediate support ahead of the 6.7000 and the year 2019 bottom surrounding 6.6700. Meanwhile, buyers will look for a clear break of the mid-September low, close to 6.7420, before taking fresh entries.