China loses strength against the US with Trump (USDCNH)

7月15日

Today, Monday, the Asian market started lower against the US dollar following Donald Trump's shooting over the weekend. The Japanese "Ocean Day" holiday celebrated on the third Monday of July, which is very important for the Japanese country, has led to moderate trading volumes without the Japanese market active. The Yen weakened slightly and on the alert of possible interventions by the Bank of Japan governor. Friday's close spurred Asian currencies to advance against the dollar on optimism of interest rate cuts by the Fed, but today the market turned around with weak Chinese GDP data causing the Yuan to lose strength.

The Trump assassination attempt has encouraged a return to safe havens causing the Dollar Index to move positive with the current price at 104.087. The chart appears to be partially replicating the movement of the USDCNH, throughout the month, with a correlation very close to 1.


As for the USDCNH cross, if we look at the chart the dollar has been gaining strength since the July 1st releases until this Friday. Since the Asian opening the dollar has created a gap down opening giving strength to the renminbi, currently holding at 7.2737 yuan per dollar. The current high zone is around 7.3106 with a low zone of 7.2570. The area through which the price has resisted falling the most is 7.2488, very close to the current checkpoint (POC) of 7.2572. The current RSI is in the mid 50.73% zone so there does not appear to be excessive volatility.

If Trump's political move continues to gain strength we will see a dollar that will seemingly continue to gain strength seeing the effect of the political attack. So it would not be unusual to see an escalation of dollar power over the yuan from the US election.
Ion Jauregui – ActivTrades Analyst






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