CNH: CNH Outperforms USD Recovery, Real Estate Equities Rebound, Trade Data On Tap Today
USD/CNH got close to 7.2700 late in Asia Pac trade on Monday, before recovering. Subsequent recoveries towards the 7.2850/60 region capped USD gains. We currently track near 7.2830. CNH gained a modest 0.09% for the session but this outperformed the broader USD recovery. USD/CNY finished up near 7.2700, while the NEER (J.P. Morgan index) gained 0.29% to 122.74.
- For USD/CNH on the topside the 50-day EMA is near 7.3000. On the downside, outside of Monday lows, note the 100-day EMA comes in just under 7.2500.
- Today on the data front we have Oct trade figures. The market looks for export growth at -3.5y/y (prior -6.2%), imports at -5.0% y/y (prior -6.3%), with a forecast trade surplus of $82bn (prior $77.83bn).
- Note that China Vice Premier He Lifeng will meet with Janet Yellen in San Francisco (Nov 9-10), ahead of a likely meeting between China President Xi Jinping and US President Biden.
- In the equity space, the Golden Dragon index was flat in US trade for Monday. To recap, the CSI 300 rose 1.35% in Monday trade to 3632.6. The real estate sub index rose 4.13%, with China Vanke stating it would repay its debts on time after getting regulator and shareholder support yesterday (see this BBG link for more details).
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JGB TECHS: (Z3) Trend Needle Continues To Point South
- RES 3: 148.74 - High Jul 24
- RES 2: 147.21 - High Aug 9
- RES 1: 146.41 - High Sep 4
- PRICE: 144.68 @ 15:29 BST Oct 06
- SUP 1: 144.15 - Low Jan 13 and a major support
- SUP 2: 143.95 - 2.00 proj of the Sep 8 - 12 - 15 price swing
- SUP 3: 143.29 - 2.618 proj of the Mar 22 - Apr 18 - May 12 swing
JGBs sold off sharply again last week, putting the contract further through support at 145.49, the Aug 17 low. A continuation lower and the clear break of this area confirms a resumption of the medium-term downtrend and paves the way for weakness towards 144.15, the Jan 13 low and a major support. On the upside, clearance of 146.41, the Sep 4 high would instead highlight a base and a possible short-term reversal.
AUSSIE 10-YEAR TECHS: (Z3) Medium-Term Trend Direction Cemented Lower
- RES 3: 96.160 - High Jul 20
- RES 2: 96.050 - High Sep 4 and a key resistance
- RES 1: 95.924 - High Sep 15
- PRICE: 95.395 @ 15:28 BST Oct 6
- SUP 1: 95.320 Lower 2.0% Bollinger Band
- SUP 2: 95.260 - Low Oct 04
- SUP 3: 94.565 - 1.0% 10-dma envelope
The Aussie 10yr futures broader trend direction is down, with the weakness cementing itself further through the Wednesday close. Key support and the bear trigger at 95.660, the Aug 17 low, has been breached. The break of this level reinforces a bearish theme and also confirms the breach of a major support at 95.670, the Jun 17 2022 low, marking a resumption of the medium-term downtrend. The focus is on 95.260, the October pullback low. Initial key resistance has been defined at 96.050, the Sep 4 high.
USDCAD TECHS: Northbound
- RES 4: 1.3862 High Mar 10 and a key resistance
- RES 3: 1.3857 2.0% 10-dma envelope
- RES 2: 1.3805 High Mar 24
- RES 1: 1.3786 High Oct 5
- PRICE: 1.3714 @ 15:59 BST Oct 6
- SUP 1: 1.3580 20-day EMA
- SUP 2: 1.3514 50-day EMA
- SUP 3: 1.3417 Low Sep 29
- SUP 4: 1.3381 Low Sep 19 and a key support
USDCAD traded higher this week and the pair remains bullish. Price breached key resistance at 1.3695, the Sep 7 high. This highlights a bullish theme and a reversal of the recent bearish phase. The break also confirms a resumption of the uptrend that started mid-July. Trendline resistance - at 1.3699 and drawn from the Oct 13 ‘22 high, has also been cleared and is a bullish development. Support is at 1.3580, the 20-day EMA.
