USD/CNY: Slips below 7.0900 to trim PBOC-led gains


  • USD/CNY takes a U-turn from 7.0934, still positive on a day after flashing two-day losses.
  • PBOC cuts 14-day reverse report rate, ADB slashes economic forecasts.
  • Virus woes, geopolitical tension with India weigh on the quote.
  • Second-tier US data, risk catalysts to offer near-term directions to the traders.

Having initially surged to 7.0934, USD/CNY currently drops to 7.0890, up 0.06% on a day, during Thursday’s Asian session. Even so, the pair snaps the previous two-day fall as virus woes join the People’s Bank of China’s (PBOC) rate cut. Additionally, China’s tussle with India and the Asian Development Bank’s (ADB) downbeat economic forecasts also weaken the prices.

The PBOC offered a surprise rate cut during early Thursday. The Chinese central bank cut the rate on 14-day reverse repurchase agreements to 2.35% vs. 2.55% previous. Though, the 7-day reverse repo remains unchanged at 2.20%.

Other than the PBOC rate cut, the fears relating to the fresh spread of the coronavirus (COVID-19) join the Indian-China tension to drag the quote downwards. Although the latest numbers from China, especially from Beijing recede from the latest highs, the Chinese capital is still under partial lockdown while holding down major flight operations. Elsewhere, India recently gave more power to its military while dealing with the dragon nation. New Delhi also bears the allegations of disapproving the purchase of Chinese goods and trigger trade war.

Elsewhere, the ADB slashed China’s 2020 growth forecast to 1.8% from 2.3% while expecting a 7.4% growth for 2021.

It should also be noted that the market’s risk-tone seems bogged down by the pandemic fears, which in turn pays less attention to US President Donald Trump’s signal of the cure of the deadly disease. In doing so, the US 10-year Treasury yields dropped 2.6 basis points (bps) to 0.70% whereas stocks in China post mild losses but those from Japan decline over 1.0% by the press time.

Looking forward, traders will have to closely observe the qualitative fundamental factors for immediate direction amid a lack of major data/events ahead of the US session.

Technical analysis

21-day EMA near 7.0935 restricts the pair’s immediate upside, which in turn highlights the importance of a 100-day EMA level of 7.0638 during the USD/CNY quote’s further weakness.

Additional important levels

Overview
Today last price 7.0891
Today Daily Change 0.0040
Today Daily Change % 0.06%
Today daily open 7.0851
 
Trends
Daily SMA20 7.1065
Daily SMA50 7.0888
Daily SMA100 7.0535
Daily SMA200 7.0404
 
Levels
Previous Daily High 7.0968
Previous Daily Low 7.0845
Previous Weekly High 7.0909
Previous Weekly Low 7.0562
Previous Monthly High 7.1783
Previous Monthly Low 7.0622
Daily Fibonacci 38.2% 7.0892
Daily Fibonacci 61.8% 7.0921
Daily Pivot Point S1 7.0808
Daily Pivot Point S2 7.0765
Daily Pivot Point S3 7.0685
Daily Pivot Point R1 7.0931
Daily Pivot Point R2 7.1011
Daily Pivot Point R3 7.1054

 

 

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

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD edges above 1.18 amid mixed US data, slim stimulus hopes

EUR/USD is trading above 1.30 after US Durable Goods Orders beat expectations but Consumer Confidence missed estimates. Hopes for a US stimulus deal are slim with a week left until the elections.

EUR/USD News

GBP/USD stabilizes above 1.30 amid Brexit and covid uncertainty

GBP/USD is hovering above the round 1.30 levels as rising UK COVID-19 cases, uncertainty about Brexit, and PM Johnson's political problems weigh on sterling. US data has been mixed.

GBP/USD News

XAU/USD ticks up to $1,910 and turns positive on the day

Gold futures have found support right below the $1,900 area earlier today before inching up to $1,910, turning positive on daily charts. The precious metal lost ground, with the US dollar building up during the European session on Tuesday, to appreciate during the North American session with market sentiment improving moderately.

Gold News

Bitcoin breaks new yearly highs; the road to $15,000 is clear

Bitcoin breaks new yearly highs and hits $13,464. The road to $15,000 is clear as there are no major resistance levels above the current price.

Read more

WTI trims losses and moves near $39.00/bbl ahead of API

Following two consecutive daily pullbacks, prices of the West Texas Intermediate regain some buying interest and reach the $39.00 mark per barrel on turnaround Tuesday.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures