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Yuan crosses 10-week-old hurdle near 7.1200 as US Dollar slides despite Fed rate hike

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  • USD/CNH drops to the fresh 10-week low on breaking short-term key support.
  • US Dollar weakness supersedes China offshore Yuan’s ignorance to downbeat China industrial profits for January-June period.
  • Four-month-old rising support line lures USD/CNH bears; bulls need validation from 50-DMA, falling trend line from late June, 50-DMA.

USD/CNH takes offers to refresh the 2.5-month low around 7.1160, bouncing off 7.1210 by the press time of very early Thursday morning in Europe.

In doing so, the offshore Chinese Yuan (CNH) justifies the quote’s downside break of a 10-week-old rising support line, now immediate resistance around 7.1320.

That said, bearish MACD signals and the broad US Dollar weakness, amid expectations of no more rate hikes from the top-tier central banks keep the USD/CNH bears hopeful.

With this, the US Dollar Index (DXY) fails to cheer the Federal Reserve’s (Fed) hawkish rate hike amid fears of a sooner end to the tightening spell.

On the contrary, downbeat prints of China’s Industrial Profit for the January-June period, down 16.8% compared to an 18.8% fall in the profits during the first five months of the year 2023, per China’s National Bureau of Statistics (NBS) data released early Thursday.

It should be noted that a clear downside break of the stated support line and aforementioned oscillators, as well as fundamentals, favor the USD/CNH bears to aim for a four-month-old rising support line, close to 7.0730 by the press time.

On the contrary, an upside break of the previous support line, close to 7.1320, isn’t going to welcome the USD/CNH bulls as the 50-DMA and a one-month-old falling resistance line challenge the north-run around 7.1640 and 7.2150 in that order.

USD/CNH: Daily chart

Trend: Further downside expected

 

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