USD/CNY analysis: Chinese yuan could slip by another 1.65%

June 26, 2023 09:07 PM PDT | By Invezz

USD/CNY analysis: Chinese yuan could slip by another 1.65% — Image source: Invezz

Chinese yuan retreat continues

Most emerging market currencies like the Turkish lira and the South African rand have been in a strong bearish trend in the past few months. The same is true for the Chinese yuan, also known as the renminbi.

Data compiled by TradingView shows that the USD to Chinese yuan exchange rate has been in a strong bullish trend this year. This performance happened as concerns about the country’s recovery continued.

The most recent economic numbers have been weaker than experts. China’s industrial output and consumer spending have been in a downward spiral. Industrial production rose by 3.5% YoY, lower than the median expectations. Retail sales rose gradually while youth unemployment rate are falling.

Other leading indicators are not doing good. Commodity prices like copper and crude oil prices have dropped by double digits in the past few months. In most periods, these commodities do well when the Chinese economy is outperforming.

Despite all this, authorities in Beijing believe that the economy is on track to recover. In a statement, Premier Li Qiang said that the economy will likely hit Beijing’s target of over 5%. He believes that recovery in Q2 will be faster than in the first quarter. He also warned that the purported de-risking and near-shoring, saying:

“As economic globalization has already made the world economy an integral whole where everyone’s interests are closely entwined, countries are interdependent, interconnected with each other, on their economies.”

USD/CNY technical analysis

USDCNY chart by TradingView

The USD/CNY exchange rate has been in a strong bullish trend in the past few months. On the daily chart, it has moved to the upper side of the Bollinger Bands. The pair has jumped above the 25-day and 50-day exponential moving averages.

Additionally, the pair is sitting above the key support level at 6.97, the highest point on March 9th of this year. Therefore, the pair will likely continue rising as buyers target the important resistance point at 7.3284, the highest point on November 1st last year. This target is about 1.65% above the current level.

The post USD/CNY analysis: Chinese yuan could slip by another 1.65% appeared first on Invezz.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.