USD/CNH turns red on solid Caixin October PMI


  • CNH picked up a bid on the upbeat Caixin PMI report. 
  • The losses in the USD/CNH could be reversed on potential risk aversion. 

The bid around China's offshore Yuan (CNH) strengthened, pushing the USD/CNH pair lower from the session high of 7.0515 after key data showed China's factory activity unexpectedly expanded at the fastest pace in well over two years in October. 

The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI), which focuses on small and medium-sized export-oriented units, rose to 51.7 in October from 51.4 in September, marking the third straight month of expansion and beating the expected dip in growth to 51.0.

Notably, the pace of expansion was the fastest in over two years. 

The data has likely relieved tensions of a deeper economic slowdown, triggered by the official (government) PMI released on Thursday, which showed the factory activity shrank for a sixth straight month in October and growth in the service sector fell to lowest since February 2016. 

As a result, the USD/CNH pair surrendered gains and was last seen trading at session lows near 7.0415, representing a 0.10% loss on the day. 

The losses, however, will likely be reversed if the S&P 500 futures drop into the red, boosting haven demand for the US Treasuries and the US Dollar.  As of writing, the index futures are reporting a 0.21% gain. 

The losses in the index futures cannot be ruled out, as historical data shows the US equities have a strong positive correlation with the Fed funds rate. The Federal Reserve (Fed) delivered a third 25 basis point rate cut of 2019 on Oct.30.

Technical levels

USD/CNH

Overview
Today last price 7.043
Today Daily Change -0.0036
Today Daily Change % -0.05
Today daily open 7.0466
 
Trends
Daily SMA20 7.0851
Daily SMA50 7.1096
Daily SMA100 7.0245
Daily SMA200 6.9027
 
Levels
Previous Daily High 7.0543
Previous Daily Low 7.0295
Previous Weekly High 7.086
Previous Weekly Low 7.0504
Previous Monthly High 7.1705
Previous Monthly Low 7.0295
Daily Fibonacci 38.2% 7.039
Daily Fibonacci 61.8% 7.0448
Daily Pivot Point S1 7.0326
Daily Pivot Point S2 7.0186
Daily Pivot Point S3 7.0077
Daily Pivot Point R1 7.0575
Daily Pivot Point R2 7.0683
Daily Pivot Point R3 7.0824

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD advances above 0.6950 as risk-on mood dominates

Following a bearish opening gap, AUD/USD has recovered ground and trades above 0.6950, tracking the bounce in the S&P 500 futures. The bulls shrug off US-China tensions and the worsening coronavirus situation in the US and Australia. 

AUD/USD News

USD/JPY stays depressed below 107.00 within descending triangle

USD/JPY is trading in the red on Monday near 106.80. The pair has carved out a big descending triangle over the past 3.5-months. At press time, the lower end of the triangle is located at 106.10, and resistance is seen at 108.93. 

USD/JPY News

Gold hovers above $1,800 as dollar drops despite lingering coronavirus concerns

Gold rises 0.30% as the dollar index drops 0.20%. The US stock futures rise, keeping the safe-haven US dollar under pressure. The US coronavirus cases tally crosses the 3.3 million mark. 

Gold News

Data, earnings, central banks and virus cases in focus

Risk appetite took a turn for the better at the end of last week despite an array of the usual suspect risk factors (accelerating Covid-19 cases, US-China tensions, rich valuations). 

Read more

WTI: 200-HMA probes bears above $40.00

WTI stays pressured beyond $40.00 despite multiple bounces off 200-HMA. MACD conditions suggest bears rolling up their sleeves for entry. Bulls will have multiple upside barriers beyond $41.00.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures