• USD/CNH snaps three-day uptrend following unimpressive China CPI, PPI.
  • Shanghai and Beijing unveiled fresh activity restrictions after dialing back some a few days back, mass testing is on the way.
  • Risk-off mood ahead of US inflation data challenge bears.

USD/CNH pulls back from a weekly top, refreshing an intraday low around 6.6950, even as China’s inflation data came in mixed for May. The reason could be linked to the US dollar’s pullback ahead of the key Consumer Price Index (CPI) figures for May.

China’s headline inflation number, namely the Consumer Price Index (CPI), reprints 2.1% figures to ease below the 2.2% market consensus. Further, the factory-gate inflation gauge, namely the Producer Price Index (PPI), matches the 6.4% forecasts for May.

It’s worth noting, however, that the fresh covid fears in China, due to the return of activity restrictions in Shanghai and Beijing, challenge the USD/CNH bears. “China's commercial hub of Shanghai faces an unexpected round of mass COVID-19 testing for most residents this weekend - just 10 days after a city-wide lockdown was lifted - unsettling residents and raising concerns about the impact on business,” said Reuters.

Furthermore, Escalating fears of faster/heavier rate hikes and the negative economic repercussions of the same seem to weigh on the market’s performance of late. The growing concerns over hot inflation and the Russia-Ukraine tussles are some of the extra catalysts that keep USD/CNH bulls hopeful.

Talking about the US inflation data, the CPI is expected to remain static at around 8.5% YoY but the White House has already signaled a higher number, which in turn could renew the US dollar buying and push back the USD/CNH sellers.

Technical analysis

Thursday’s Doji candlestick below the short-term hurdle, namely the 21-DMA level of 6.7075, directs USD/CNH bears towards revisiting the previous month’s low near 6.6475.

Additional important levels

Overview
Today last price 6.6962
Today Daily Change -0.0044
Today Daily Change % -0.07%
Today daily open 6.7006
 
Trends
Daily SMA20 6.7082
Daily SMA50 6.6006
Daily SMA100 6.4755
Daily SMA200 6.4392
 
Levels
Previous Daily High 6.7096
Previous Daily Low 6.6658
Previous Weekly High 6.7152
Previous Weekly Low 6.6168
Previous Monthly High 6.8384
Previous Monthly Low 6.6116
Daily Fibonacci 38.2% 6.6929
Daily Fibonacci 61.8% 6.6825
Daily Pivot Point S1 6.6745
Daily Pivot Point S2 6.6483
Daily Pivot Point S3 6.6308
Daily Pivot Point R1 6.7182
Daily Pivot Point R2 6.7357
Daily Pivot Point R3 6.7619

 

 

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