CNH: USD/CNH Off Highs, Potential Meeting Eyed, As US-China Tensions Continue
(MNI Australia) USD/CNH drifted lower post the Asia close, in line with a USD pull back (ex yen). We got close to 6.8200 late in NY trade and hold close to this level currently. Yesterday's highs were just above 6.8460, levels last seen close to the start of the year. The CNY edged down slightly, last near 126.00 (J.P. Morgan Index).
- The on-going balloon saga continues to dominate the headlines, although it is possible that US Secretary of State Blinken will meet with China Foreign Minister Wang Yi later this week at a security conference.
- China claimed a number of US balloons overflew China territory since 2022, something the US side has denied.
- Elsewhere China equity sentiment improved, led by mainland gains yesterday, with the CSI 300 up by just over 0.90%. In US trading on Monday the Golden Dragon Index rose by 2.60%.
- The local data calendar is empty today, while tomorrow delivers the 1yr MLF rate. No change is expected (currently at 2.75%), while 500bn yuan is expected in terms of volumes (779bn yuan prior).
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AUSSIE 10-YEAR TECHS: (H3) Extends Spell of Strength
- RES 3: 97.185 - High Apr 5
- RES 2: 97.040 - High Aug 03
- RES 1: 96.714 - High Dec 9
- PRICE: 96.420 @ 15:47 GMT Jan 13
- SUP 1: 95.675 - Low Oct 24
- SUP 2: 95.670 - Low Jun 17 and a key support
- SUP 3: 95.360 - 1.00 proj of the Aug - Oct - Dec price swing
Aussie 10y futures extended their bounce off cycle lows with a solid bounce last Friday. The rally puts prices around 40 ticks above the late December lows, but still short of the next material resistance at 96.714. For now, the bear leg remains in play and the recent continuation lower into end-2022 suggests scope for weakness near-term. An extension would expose the key support at 95.675, the Oct 24 low and 95.670, the Jun 17 low, on the continuation chart.
USDCAD TECHS: Downtrend Remains Intact
- RES 4: 1.3751 High Nov 4
- RES 3: 1.3705 Dec 16 and the bull trigger
- RES 2: 1.3665 High Jan 6
- RES 1: 1.3515 50-day EMA
- PRICE: 1.3416 @ 16:18 GMT Jan 13
- SUP 1: 1.3322 Low Jan 13
- SUP 2: 1.3317 Low Nov 24 / 25
- SUP 3: 1.3226 Low Nov 15 and bear trigger
- SUP 4: 1.3205 61.8% retracement of the Aug 11 - Oct 13 rally
The short-term outlook in USDCAD remains bearish. The pair has breached a key support at the 1.3385 level - the Dec 5 low. The break strengthens bearish conditions and opens 1.3317, the Nov 24 / 25 low. The bear trigger lies at 1.3226, the Nov 15 low. On the upside, key resistance is far-off at 1.3705, the Dec 16 high. Initial firm resistance is seen at 1.3515, the 50-day EMA.
AUDUSD TECHS: Trend Needle Points North
- RES 4: 0.7137 High Aug 11
- RES 3: 0.7059 2.236 proj of the Oct 13 - 27 - Nov 3 price swing
- RES 2: 0.7009 High Aug 26
- RES 1: 0.6994 High Jan 13
- PRICE: 0.6944 @ 16:16 GMT Jan 13
- SUP 1: 0.6860 Low Jan 9
- SUP 2: 0.6813 20-day EMA
- SUP 3: 0.6688 Low Jan 3 and key support
- SUP 4: 0.6650 Low Dec 22
AUDUSD extended higher Thursday, amid global dollar weakness. This retains a bullish theme. The pair has cleared 0.6893, the Dec 13 high and this confirmed a resumption of the uptrend that started Oct 13. The move higher maintains the bullish price sequence of higher highs and higher lows and note that moving average studies are in a bull mode position. The focus is on 0.7009 next, the Aug 26 high. Key support lies at 0.6688, Jan 3 low.
