USD/CNH Still Capped by Bearish Trend Line
Ming Lam June 2, 2020 12:41 PM
While further exchanges of actions and rhetoric between the two biggest economies in the world are expected, the U.S. dollar is weakening against the Chinese yuan...
Those heightened tensions between the U.S. and China give no signs of softening in the near future.
In response to China imposing a controversial national security law on Hong Kong, U.S. President Donald Trump announced on Friday that his government will end Hong Kong's preferential trade status.
Trump also said sanctions would be imposed on Chinese and Hong Kong officials involved in eroding the city's autonomy.
Then, on Monday China reportedly ordered state-owned agencies to halt purchases of U.S. agriculture products putting the first phase trade deal with the U.S. in jeopardy.
While further exchanges of actions and rhetoric between the two biggest economies in the world are expected, the U.S. dollar is weakening against the Chinese yuan.
On an Intraday 30-minute Chart, USD/CNH (CNH means Chinese Yuan in the offshore market) marked on May 27 a recent high of 7.1964, which was last seen in September 2019.
Source: GAIN Capital, TradingView
In fact, the declining trend line drawn from that high on May 27 remains intact.
A return to the Immediate Support at 7.1205 (a low seen this morning) would expose the Next Support at 7.1045 (a key support level seen in May).
Only a clear break above the Overhead Key Resistance at 7.1380 would bring about a bullish reversal for the greenback against the yuan.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.