{"id":15289,"date":"2024-10-08T09:02:43","date_gmt":"2024-10-08T09:02:43","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=15289"},"modified":"2024-10-08T09:02:43","modified_gmt":"2024-10-08T09:02:43","slug":"usdcnh-steadies-against-yuan-weakness","status":"publish","type":"post","link":"https:\/\/www.global-vtrader.com\/en\/analysis\/usdcnh-steadies-against-yuan-weakness\/","title":{"rendered":"USDCNH Steadies Against Yuan Weakness"},"content":{"rendered":"\n<p><strong>Key Points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The USDCNH holds above 7.05, with the yuan experiencing its sharpest decline in a decade.<\/li>\n\n\n\n<li>China\u2019s stock markets rallied, but the lack of clear stimulus measures created uncertainty.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>China\u2019s stock markets surged post-Golden Week, with the CSI300 up 5.9% and the Shanghai Composite gaining 4.6%. However, despite this, the yuan remained under pressure as USDCNH held above 7.05.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/wp-content\/uploads\/2024\/10\/image-9-1024x450.jpeg\" alt=\"\" class=\"wp-image-15291\" style=\"width:1450px;height:auto\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: USDCNH tests key support at 7.0480 as bearish momentum slows down, as seen on the <\/em><em style=\"font-size: revert;color: initial\"><a data-lark-is-custom=\"true\" href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\">VT Markets app.<\/a><\/em><span data-lark-record-data=\"{&quot;rootId&quot;:&quot;GISzdwZwsotIngxVUN9lbyjYgid&quot;,&quot;text&quot;:{&quot;initialAttributedTexts&quot;:{&quot;text&quot;:{&quot;0&quot;:&quot;VT Markets app.&quot;},&quot;attribs&quot;:{&quot;0&quot;:&quot;*0*1*2+f&quot;}},&quot;apool&quot;:{&quot;numToAttrib&quot;:{&quot;0&quot;:[&quot;author&quot;,&quot;7416565344254312479&quot;],&quot;1&quot;:[&quot;italic&quot;,&quot;true&quot;],&quot;2&quot;:[&quot;link&quot;,&quot;https%3A%2F%2Fvtmarketsapp.onelink.me%2FCD7D%2F240525WA&quot;]},&quot;nextNum&quot;:3}},&quot;type&quot;:&quot;text&quot;,&quot;referenceRecordMap&quot;:{},&quot;extra&quot;:{&quot;channel&quot;:&quot;saas&quot;,&quot;pasteRandomId&quot;:&quot;16c221b3-b8c4-43af-b020-23bfc3152174&quot;,&quot;mention_page_title&quot;:{},&quot;external_mention_url&quot;:{}},&quot;isKeepQuoteContainer&quot;:false,&quot;isFromCode&quot;:false,&quot;selection&quot;:[{&quot;id&quot;:235,&quot;type&quot;:&quot;text&quot;,&quot;selection&quot;:{&quot;start&quot;:152,&quot;end&quot;:167},&quot;recordId&quot;:&quot;LDpCdNb26odqSNxeJujlojoLgQc&quot;}],&quot;payloadMap&quot;:{},&quot;isCut&quot;:false}\" data-lark-record-format=\"docx\/text\" class=\"lark-record-clipboard\"><\/span><\/p>\n\n\n\n<p>USD\/CNH closed at <strong>7.05827<\/strong>, reflecting a mild drop of 0.15% during the session. The price fluctuated between a <strong>high of 7.08450<\/strong> and a <strong>low of 7.04828<\/strong>, signalling <strong>relatively subdued trading activity<\/strong> within this range.<\/p>\n\n\n\n<p>The pair remains below its key moving averages (5, 10, and 30-period), suggesting the <strong>bearish trend is still intact<\/strong>.<\/p>\n\n\n\n<p>The 30-period moving average in particular is acting as a cap on upward momentum, while shorter-term averages signal potential sideways movement in the near term.<\/p>\n\n\n\n<p>The MACD (12, 26, 9) provides further confirmation of weak momentum. With the MACD line trending just below the signal line and the histogram showing <strong>small positive bars<\/strong>, the recent bearish momentum has softened but remains a factor to consider.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Continued Downward Trend Anticipated<\/h2>\n\n\n\n<p>Support is seen near 7.04828, the session&#8217;s low. If the pair breaches this level, it may target further downside, with 7.04000 acting as the next psychological support.<\/p>\n\n\n\n<p>Resistance is found around 7.07000, which aligns with the cluster of highs from previous sessions. A break above this could suggest some recovery, but the overall technical setup remains cautiously bearish.<\/p>\n\n\n\n<p>Given the current technical structure, we observe that the USD\/CNH pair may continue to face downward pressure, especially if it struggles to reclaim its moving averages in the coming sessions.<\/p>\n\n\n\n<p>The MACD&#8217;s recent softening might provide temporary relief, but unless the pair breaks through resistance, traders may need to brace for further consolidation or downside testing.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Yuan\u2019s Struggles Amid Economic Concerns<\/h2>\n\n\n\n<p>With the yuan posting its sharpest drop in 10 months, investor sentiment is wary, and traders are closely observing the People\u2019s Bank of China (PBoC) and government policy directions.<\/p>\n\n\n\n<p>The Chinese government recently pulled forward 200 billion yuan to support investment projects and local governments, but investors hoped for more concrete fiscal measures.<\/p>\n\n\n\n<p>This uncertainty is keeping the US dollar in demand against the yuan, which has struggled to recover due to weak domestic growth indicators.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">China stock skepticism gets louder as world-beating run extends <a href=\"https:\/\/t.co\/hyBF6ptA5E\">https:\/\/t.co\/hyBF6ptA5E<\/a> via <a href=\"https:\/\/twitter.com\/business?ref_src=twsrc%5Etfw\">@business<\/a><\/p>&mdash; Yahoo Finance (@YahooFinance) <a href=\"https:\/\/twitter.com\/YahooFinance\/status\/1843219467897110809?ref_src=twsrc%5Etfw\">October 7, 2024<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The USDCNH is testing key support at 7.05, with the potential to move higher if additional stimulus measures are delayed or if China&#8217;s economic recovery falters.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Global Commodities and Pressure on Yuan<\/h2>\n\n\n\n<p>Adding pressure to the yuan, global industrial commodities like iron ore and copper also faced headwinds, further dampening investor confidence in China&#8217;s recovery.<\/p>\n\n\n\n<p>Iron ore prices slid 5%, and copper hit its lowest in a week, both critical barometers of industrial activity, which dragged down market sentiment.<\/p>\n\n\n\n<p><strong>You might also like: <a href=\"https:\/\/www.vtmarkets.com\/analysis\/usdcnh-on-the-move-amid-beijings-stimulus\/\">USDCNH on the Move Amid Beijing\u2019s Stimulus | VT Markets<\/a><\/strong><\/p>\n\n\n\n<p>The PBoC has room for monetary policy adjustments, but concerns linger about its ability to stabilize the yuan.<\/p>\n\n\n\n<p>For USDCNH traders, the focus will remain on China&#8217;s policy direction and how global commodity trends impact the broader Chinese economy.<\/p>\n\n\n\n<p>Should Chinese officials fail to implement more substantial fiscal policies, the pair may break further above 7.05, extending the yuan&#8217;s weakness.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>What to Look Out For Next<\/strong><\/h2>\n\n\n\n<p>Clarity on stimulus measures and China\u2019s economic recovery remains crucial for the yuan. Should the government introduce more concrete measures, we could see some support for the currency. <\/p>\n\n\n\n<p>Additionally, any signals from the People&#8217;s Bank of China (PBoC) regarding rate cuts or intervention could influence movements in the USDCNH, with resistance levels around 7.10 being key to watch. <\/p>\n\n\n\n<p>Global commodity trends, especially in iron ore and copper, are also important indicators of China\u2019s industrial health, which will directly impact the yuan\u2019s performance in the coming weeks.<\/p>\n\n\n\n<p><strong>Start trading now \u2014 click <a href=\"https:\/\/www.vtmarkets.com\/trade-now\/?utm_campaign=account_c&amp;utm_source=dma&amp;utm_medium=website\">here<\/a> to create your live VT Markets account<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The USDCNH pair remains steady as traders weigh China&#8217;s stimulus measures and the yuan&#8217;s drop, reflecting cautious market sentiment. &#8211; vtmarkets.com <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[27],"tags":[28,12,45],"class_list":["post-15289","post","type-post","status-publish","format-standard","hentry","category-analysis","tag-dollar","tag-forex","tag-yuan"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/15289","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/comments?post=15289"}],"version-history":[{"count":0,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/15289\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/media?parent=15289"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/categories?post=15289"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/tags?post=15289"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}