OIL: Oil Up On New US Russia Sanctions, US Stock Drawdown & US-India Trade Deal
Oil prices rose sharply on Wednesday driven by a number of coincident supportive factors. The US has...
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CNH: CNH Lags USD Softness, PBoC To Be Data Dependent
USD/CNH tracks near 7.1160 in early Tuesday dealings, after posting little net change for Monday's session. This lagged broader USD softness, with the BBDXY index down 0.20%, while the DXY index fell by 0.30%. USD sentiment moved off earlier Monday highs, with a subdued tone amid a lighter economic calendar to start the week, with central bank speakers providing little to boost volatility. Spot USD/CNY finished up at 7.1145, while the CNY CFETS basket tracker rose 0.20% to 96.55 (per BBG).
- For USD/CNH technicals, little has changed. The 20-day EMA is around 7.1265, while the 50-day is close to 7.1500. All key EMAs are drifting lower. On the downside, we are comfortably above recent lows of 7.0851.
- From late yesterday, the PBoC remains committed to a moderately accommodative stance, and any policy adjustment will be data-based, Governor Pan Gongsheng told reporters on Monday, in comments which provided few clues as to any future easing.
- US lawmakers, visiting China in recent days, called for fair and reasonable access to China's market, per BBG. They met with China's Vice Premier He Lifeng.
- In the cross asset space, US Tsy yields continued to tick higher, aiding US-CH yield differentials, but this didn't support broader USD sentiment.
- In Monday US trade, the Golden Dragon Index lost 0.96%, down for the 3rd straight session. Onshore equities did better yesterday, but remain off recent highs. The China to global equity ratio is lower over the past week, providing less downside impetus to USD/CNH.
ASIA: Coming Up In Asia Pac Markets On Tuesday
| 0000BST | 0700HKT | 0900AEST | Australia Sep Preliminary PMIs |
| 0200BST | 0900HKT | 1100AEST | Australia 2054 Bond Sale |
| 0335BST | 1035HKT | 1235AEST | New Zealand Bill Sale |
Source: Bloomberg Finance L.P/MNI
USDCAD TECHS: Remains Above Support For Now
- RES 4: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 3: 1.3925 High Aug 22 and the bull trigger
- RES 2: 1.3890 High Sep 11
- RES 1: 1.3848 High Sep 15
- PRICE: 1.3817 @ 19:32 BST Sep 22
- SUP 1: 1.3727 Low Aug 29 and a bear trigger
- SUP 2: 1.3709 61.8% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 3: 1.3658 76.4% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 4: 1.3637 Low Jul 25
A sharp sell-off in USDCAD early last week resulted in a break of the 20-and-50-day EMAs. This undermines a recent bullish theme and exposes key short-term support at 1.3727, the Aug 27 low. A clear break of this level would strengthen a bearish threat and signal scope for a deeper retracement. For bulls, resistance levels to watch are; 1.3890, the Sep 11 high, and 1.3925, the Aug 22 high and bull trigger.
