USD/CNH defies Monday’s recovery moves, ignores US allegations on China
- USD/CNH fails to carry the earlier recovery gains, registers the fourth day of decline in the previous five.
- US President Trump alleges China of misreporting virus data, responsible for the outbreak.
- The epicenter Wuhan has zero patient, mainland China reports six new cases.
- No major data from China will keep the pair at the mercy of virus updates, US statistics.
Despite bouncing off 7.0878 to 7.092 during the last hour, USD/CNH remains 0.05% down on a day while taking rounds to 1.0905 during Tuesday’s Asian session.
While Monday’s downbeat Chinese Industrial Profits, -34.9% versus +5.4% prior, seems to have triggered the pair’s recovery moves, the quote rejoins the southward trajectory following the latest coronavirus (COVID-19) updates.
China’s Wuhan, the epicenter of the pandemic, announced itself as the virus-free on Monday after discharging the final patient. Even so, the latest figures from mainland China suggest that there are six new cases on April 27 versus three the previous day.
Elsewhere, US President Donald Trump keeps alleging China for the global outbreak of the deadly virus.
However, the market’s risk-tone seems to extend the early-week optimism as the US Treasury yields and S&P 500 Futures register mild gains by the press time.
Given the lack of major data/events from China ahead of Thursday’s official PMI, US Consumer Confidence, Richmond Fed Manufacturing Index and S&P/Case-Shiller Home Price Index can decorate today’s calendar. On the qualitative front, virus updates will be the key to watch.
Technical analysis
The pair continues to extend gradual weakness below a five-week-old falling trend line, currently near 7.1000, which in turn highlights the importance of a 50-day SMA level of 7.0515 for sellers.