- Summary:
- USDCNY is trading higher on the back of lower than expected Caixin Services PMI data. US-China trade talks remain in focus.
Trading on the USDCNY resumed after the week-long holiday in China, with the USDCNY (USDCNH) gaining on the back of the slump in the Caixin Services PMI data. The Caixin Services PMI came in at 51.3, against the market’s expected figure of 52.1 (also the previous figure).
The US-China trade talks may also influence the reference rate of the USDCNH. The reference rate for the USDCNY is presently pushing intraday highs at 7.15368, after opening lower earlier in the session. The intraday support level for the USDCNY (USDCNH) stands at 7.1236.
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Technical Outlook for USDCNY
The USDCNY has resumed the uptrend after the termination of the price correction on September 13. Presently, price is on its way to reaching the September 2 highs after taking out the 23.6% retracement resistance at 7.10523 (August 9 high).
If price is able to sustain a closing penetration of 7.15008 (September 5 and 27 highs), then price would have the room to push for September 2 highs of 7.19034.
On the flip side, a failed break of 7.15008 reopens the door for a test of 7.0512 (August 21 lows) at 38.2% retracement. Below this area, the 50% retracement price of 7.00626 (August 14 low) will become relevant.