On the Chinese side, the official China Daily welcomed the agreement between Trump and Xi to ” make way for negotiations”. However, it warned “agreement on 90 percent of the issues has proved not to be enough, and with the remaining 10 percent where their fundamental differences reside, it is not going to be easy to reach a 100-percent consensus, since at this point, they remain widely apart even on the conceptual level.”
USD/CNH (offshore Yuan) drops sharply today and the Yuan rebounds on trade news. With 55 day EMA firmly taken out, the rise from 0.6699 should have completed at 0.6920, after failing 6.9800 resistance. Imminent pressure on breaking the psychologically important 7 handle is eased. Deeper fall could be seen back towards 6.6699 could be seen for the near term. But strong support should be seen around there to contain downside. Eventual break of 6.9800 is still expected at a later stage.
