The Chinese Yuan rises notably today as both US and China offered gestures of good will ahead of next month’s trade meeting. China announced tariffs exemptions on some US products yesterday while US responded by delaying the next batch of new tariffs. USD/CNH topped in the near term at 7.1964 after both sides agreed to come back to the table.
Technically, USD/CNH’s pull back from 7.1964 is set to continue as tensions stabilize. Deeper fall would be seen back to 55 day EMA (now at 7.0307). However, we’d expect very strong support at 6.9909 cluster support (38.2% retracement of 6.6704 to 7.1964 at 6.9949) to contain downside to bring rebound. That is, the psychological important 7 handle might be breached, but not broken.
