The National Development and Reform Commission (NDRC) press conference has left market participants wanting for more specifics regarding potential stimulus measures, with USD/CNH last recorded at 7.0582, according to OCBC FX strategist Christopher Wong.
Market Sentiment:
Wong noted that while there were initial hopes for significant announcements, the lack of concrete details has dampened expectations. The post-opening rally in Chinese equities has lost momentum, contributing to a setback in sentiment for CNH-sensitive currencies, including the Australian Dollar (AUD), South Korean Won (KRW), and Malaysian Ringgit (MYR).
Near-Term Outlook:
In the near term, USD/CNH is expected to experience two-way risks as markets process the following factors:
Disappointment over the insufficient details regarding China’s stimulus plans.
Daily fixing rates, which could indicate how comfortable policymakers are with the recent fluctuations in the Renminbi (RMB).
The potential return of US exceptionalism as the upcoming US elections approach, which may provide support for the USD.
Technical Analysis:
The bullish momentum remains intact on the daily chart, with the Relative Strength Index (RSI) showing upward movement. Key support is seen at the 7.0320 level, while resistance is identified at 7.11, corresponding to the 50-day moving average (DMA).
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