CNH: USD/CNH Testing Sub 7.1200 Amid Lower US Tsy Yields

USD/CNH tracks near 7.1950 in early Tuesday dealings. CNH lost 0.10% for Monday's session, as broader USD sentiment was on the front foot. Both the BBDXY and DXY indices rose around 0.30%. Strength in the USD Monday was likely an extended phase of position-squaring after the soft NFP print earlier this month (USD Index still 1.4% below pre-NFP levels), and ahead of the CPI print later today - the next data input for the September FOMC decision. Spot USD/CNY ended up at 7.1888, while the CNY CFETS basket tracker edged a little higher to 96.12. 

• For USD/CNH technicals, ranges for August continue to hold. Upside focus is likely to rest around the 7.2200 region, which marks the 200-day EMA, if we can sustain above 7.2000. On the downside, lows in August to date sit at 7.176.
• CNH shifts continue to follow broader USD moves, albeit with a low beta. For Monday's session, only NOK was up versus the USD in the G10 space, with other currencies losing 0.15% or more versus the USD.
• CNH/JPY is near 20.59 in early Tuesday dealings, supported sub 20.50 so far in August. EUR/CNH is just under 8.3600, with recent highs marked near 8.4000.
• In the equity space, in US trade the Golden Dragon index lost 0.29%. Onshore markets were firmer yesterday but remain sub recent highs.
• US President Trump extended the China tariff deadline by 90 days, which was widely expected.
• The local data calendar has July new loans/aggregate finance figures due between today to the 15th of August. 

• 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: 96.575 @ 15:06 BST Aug 11
• 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 gapped sharply higher Friday, clearing the weekly high on soft US NFP data. This narrows the gap with resistance at 96.730, the Sep 17 ‘24 high, leaving 96.860 as the next key level. Instead, a continuation lower would strengthen a bearish theme. This would refocus attention on 95.760, the 14 Nov ‘24 low. Conversely, a reversal higher would refocus attention on 96.860, the Apr 7 high.

Source: Bloomberg Finance L.P./MNI