- USD/CNH fails to hold on to recovery gains as protests in Hong Kong magnify US-China trade pessimism.
- Trump’s comments from the New York Economic Club luncheon will keep the spotlight.
The US-China trade story recent got another negative turn with the US condemning Hong Kong protests and pushes China to respect the nation’s autonomy. With this, the USD/CNH pair fails to cross a monthly trend line resistance while trading around 7.0028 during Tuesday’s Asian session.
While the US President’s refrain from reiterating the previous signals to tariff cut on Chinese goods triggered initial risk aversion during Monday, renewed protests in Hong Kong and the US meddling dim prospects of a trade deal between the world’s two largest economies.
The US State Department’s latest statement urges China to respect commitments that Hong Kong will enjoy a high degree of autonomy. The Trump administration also condemns violence in the protests.
That said, the US 10-year treasury yields remain on the back foot to 1.92% while Asian stocks also mark losses during early hours of trading.
On the economic front, China’s inflation numbers flashed mixed signals during the weekend and hence traders will wait for Thursday’s Industrial Production and Retail Sales for fresh impulse. However, the bearish bias of the People’s Bank of China (PBOC), as conveyed through recent USD/CNY fixes and comments from the policymakers, could keep traders entertained.
Looking at the near-term, the United States (US) President Donald Trump is up for speaking at the Economic Club Luncheon in New York and will be observed closely for any hints to trade talks with China.
Technical Analysis
Unless providing a daily closing beyond the monthly falling trend line, at 7.0055 now, prices are less likely to aim for current month top near 7.0520. Alternatively, June month high around 6.9600 could offer immediate key support to the pair.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.