USD/CNH holds above 50-day EMA as traders await China’s data dump
- US-China trade tussle continues with few upbeat developments off late.
- Easy money expectations from the Fed continue to weigh on the greenback.
- Chinas data dump will be in the spotlight for now.
USD/CNH holds its recent trading strength while trading above the 50-day exponential moving average (EMA), taking the bids to 6.88, during early Asian morning on Monday.
Even if major differences between the US and China remains as far as the trade stalemate is concerned, both the parties are recently registered positive changes to break the deadlock. Reuters report that the US firms may restart their sales to China’s Huawei in two weeks whereas China’s SCMP also noted of putting key trade officers to overcome the present trade negotiation impasse.
Though, another report from Reuters claiming that China may impose sanction on the US firms that sell arms to Taiwan continues to highlight the tension.
On a broader note, recently dovish Fedspeak keeps inflating market expectations of easy monetary policy from the US Federal Reserve and weakens the US Dollar (USD) across the board.
Moving on, China’s headline Retail Sales, Industrial Production and Gross Domestic Product (GDP) will be the key directives for the pair traders. Market consensus shows a mixed outcome of June month Retail Sales and Industrial Production, coupled with the second quarter (Q2) 2019 GDP figure.
While Retail Sales (YoY) may weaken to 8.3% versus 8.6% prior, Industrial Production can rise to 5.2% growth against 5.0% previous. Further, GDP could increase to 1.5% from 1.4% (QoQ) registered in the previous quarter but might soften to 6.2% against 6.4% when it comes to the yearly format.
Technical Analysis
Unless breaking 6.9000 upside barrier comprising multiple highs marked since early-month, chances of witnessing 6.9160 and 6.9400 seem less bright, which in turn signal the pair’s pullback to 50-day EMA level of 6.8733 that holds the key to quote’s downpour towards 6.8613, 6.8367 and 6.8166.