CNH: USD/CNH Eyeing Break Sub 7.1700 Amid USD Weakness, Lags EUR Gains

Reuters reports in an opinion poll that Trump's approval rating has risen, while Americans are also less concerned about recession risks (albei still remaining at an elevated level). 

• Reuters noted: "The two-day poll showed 44% of respondents approved of the Republican leader's performance, up from 42% in a prior Reuters/Ipsos survey carried out April 25-27." "Approval of Trump's economic stewardship rose to 39% from 36%".
• On recession concerns, Reuters noted: "Some 69% of respondents in the new poll said they were concerned about a recession, down from 76% in a Reuters/Ipsos poll conducted April 16-21."
• These results follow the recent recovery in US equity market sentiment, with bourses up strongly from recent lows. Tariff delays, coupled with hopes of a US-China trade deal at some stage over the next few months, have been key factors around the equity bounce and reduced recession odds. 

USD/CNH spent most of the post Asia close period on Tuesday firming, although we found selling interest above 7.2000. We track just under this level in early Wednesday dealings, after little change in aggregate for Tuesday's session. The CNH lagged broader USD index softness, which was weighed post the softer than expected US CPI print. The BBDXY index lost 0.70%. Spot USD/CNY finished up just under 7.2050, while the CNY CFETS basket tracker ended Tuesday at 97.24, up strongly from recent lows (per BBG). 

• For USD/CNH technicals, resumed downside momentum could see lows from yesterday (7.1789) re-tested. These levels were fresh YTD lows, which further south is a likely look at the 7.1400-7.1600 region. On the topside, upside focus will rest on the 200-day EMA near 7.2500, which marked recent highs.
• The CNH saw little benefit from broader USD softness, which was aided by the US CPI miss. US equities continued to rise, led by the tech side (Nasdaq up by 1.61%). In contrast the Golden Dragon index was around flat in Tuesday US trade.
• Tuesday's session looked more like a traditional one from an FX risk standpoint, with higher beta currencies outperforming the likes of JPY. This may have kept CNH interest somewhat sidelined, along with less equity upside compared to US markets as an additional headwind.
• Sell side names, like Goldman Sachs and J.P. Morgan have nudged up their China GDP growth forecasts, with an improved trade outlook cited (per BBG).
• Locally, we await the Apr new loans/aggregate finance figures, which are due by tomorrow, but could print today (May 15).   

• RES 3: 97.190 - High May 5 2023
• RES 2: 96.932 - 76.4% of Mar-Nov ‘23 bear leg 
• RES 1: 96.860 - High Apr 07
• PRICE: 96.390 @ 16:33 BST May 13
• SUP 1: 95.900 - Low Jan 14  
• SUP 2: 95.760 - Low 14 Nov ‘24
• SUP 3: 95.480 - Low Jan 11 2023 and a major support 

Aussie 3-yr futures continue to circle just below recent contract highs, having cleared resistance on the continuation contract. The rally has taken out resistance at 96.730, the Sep 17 ‘24 high. On the downside, any reversal lower from current levels would signal a resumption of a downtrend. A deeper sell-off would refocus attention on 95.760, the 14 Nov ‘24 low.