USDCNH Sitting on Key Support
The recent sell off in USDCNH has seen the pair breaking down through the rising channel from YTD lows with price now testing the 6.4490 support level. This is a key level for the pair and has underpinned price action over the last three months. With indicators turned lower here and the Dollar trading on a weaker footing, there is risk of a break below the level which will see bears targeting the 6.4018 level next. While the CNH rally has been a little weaker over recent days as a result of softer Chinese data, there is plenty of room for the move to gather pace if we break support.
Key Data to Watch
The big data to watch for this trade is obviously the US labour reports tomorrow. With the Dollar trading on a weaker footing following Powell’s Jackson Hole comments, any negative surprises tomorrow will likely send USD on a continued course lower over the near term, squashing Fed tapering expectations for now. The market is looking for 750k on the NFP, with anything below that likely to see support break in USDCNH.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.