CNH: USD/CNY Fixing Downtrend Persists, Error Term Widens

The USD/CNY fixing printed at 7.1815, in line with the BBG market consensus of 7.1815.

• Today's fixing is a fresh low back to early April.
• It should help keep upside USD/CNH pressures capped. Equally, the market will be looking for more detail around US-China trade talks, with earlier headlines stating the consensus reached at the Geneva meetings in May was agreed to by both sides.
• USD/CNH is a little lower in recent dealings, but at 7.1830 remains comfortably within recent ranges. 

• CHINA SETS YUAN CENTRAL PARITY AT 7.1815 WEDS VS 7.1840

US stocks continue to find demand for now on dips, the S&P looks to be turning its attention back to the all time highs. This would be very frustrating for the JPY Bulls as the JPY starts to come under pressure as a result in the crosses.

• EUR/JPY - Overnight range 164.63 - 165.64, Asia is trading around 165.50. EUR/JPY is now making new highs for the year. If this move can find some momentum it could signal the potential for this move to extend higher and begin an uptrend.
• GBP/JPY - Overnight range 194.79 - 195.86, Asia trades around 195.55. GBP/JPY failed again around the multiple tops just above 196.00. Some poor UK data capped this move overnight, a sustained break above here and the focus will turn to the 200 area.
• NZD/JPY - Overnight range 87.22 - 87.69, Asia is currently dealing 87.65. The pair is trying to break above some important resistance. A sustained move back above 88.00 would turn the focus back to the 90.00 area.

• CNH/JPY - Overnight range 20.0941 - 20.1723, Asia is currently trading around 20.1550. CNY/JPY has not bounced as much as the others, a sustained break above the 20.60 area would get JPY longs worried. 

  Fig 1 : GBP/JPY Hourly Chart

  

  Source: MNI - Market News/Bloomberg Finance L.P