Fight previous support around 6.40 on Chinese data

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  • USD / CNH softens recoveries following mixed trade figures from China.
  • Mood at risk, trading sustained above 200-HMA favors buyers.

USD / CNH is hovering 40 pips below 6.40 after the trade data was released on Monday morning. In doing so, the Chinese currency pair struggles to extend Friday night’s rallying moves as buyers attack the previous May 31 support line.

China’s trade balance fell from $ 50.50 billion market consensus to $ 45.53 billion in May. Details suggest that exports fell below the expected 41.6% and previous readings from 32.3% to 27.6%, but imports rose according to the optimistic forecast of 51.5%.

Read: China’s trade balance in May: Surplus and exports rise, wrong estimates

Apart from the mixed trading numbers, the pessimistic market sentiment is also challenging USD / CNH sellers which is confusing for traders.

Read: S&P 500 futures drop back below 4,250 amid mixed signs

Technically bullish RSI conditions join sustained trade above 200-HMA to favor USD / CNH buyers to overcome the immediate hurdle of around 6.40. However, any further rise must refresh the monthly high near 6.41 before convincing the bulls.

Meanwhile, USD / CNH sellers are less likely to enter until the quote stays above the 200-HMA level of 6.3820.

Overall, the USD / CNH rally is wavering below the key near-term hurdle, but the bears are not convinced.

Hourly USD / CNH chart

Trend: continuation of the expected recovery

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