USD/CNH May Resume Broader Uptrend as China Faces Growth Woes
The US Dollar may regain its footing against the Chinese Yuan amid favorable fundamental headwinds.
China's zero-Covid policy has been weighing on local economic output. Meanwhile, rising fears of a recession in the US are slowly weakening global growth expectations. This leaves China in a tricky spot, even if conditions open up locally. A slowing global economy could sap the demand for Chinese goods. Diverging monetary policy is also favoring the US Dollar against the Chinese currency.
On the daily chart, USD/CNH has left behind a bullish Morning Star candlestick pattern. Further upside follow-through could open the door to further gains. That would place the focus on the May high at 6.8376.
Otherwise, clearing immediate support at 6.6480 exposes the Mat low at 6.6119 as the 50-day Simple Moving Average nears.
China's zero-Covid policy has been weighing on local economic output. Meanwhile, rising fears of a recession in the US are slowly weakening global growth expectations. This leaves China in a tricky spot, even if conditions open up locally. A slowing global economy could sap the demand for Chinese goods. Diverging monetary policy is also favoring the US Dollar against the Chinese currency.
On the daily chart, USD/CNH has left behind a bullish Morning Star candlestick pattern. Further upside follow-through could open the door to further gains. That would place the focus on the May high at 6.8376.
Otherwise, clearing immediate support at 6.6480 exposes the Mat low at 6.6119 as the 50-day Simple Moving Average nears.
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