The offshore Chinese yuan (USDCNH) fell against the US dollar on Wednesday, closing at 7.28359, as trade tensions reignited between the world’s two largest economies.
Beijing retaliated swiftly after Washington imposed a 10% tariff on all Chinese imports, countering with duties on US energy exports, including crude oil and liquefied natural gas.
While these measures signal a renewed escalation in the US-China trade war, the yuan’s decline was cushioned by the People’s Bank of China’s (PBOC) continued intervention.
The central bank set its midpoint fixing stronger than market expectations, indicating an effort to manage excessive yuan depreciation and prevent heightened volatility.
Image: USDCNH dips near 7.28359 as momentum weakens, with traders watching key support and resistance levels for potential breakout signals, as seen on the VT Markets app.
USDCNH closed at 7.28359, marking a slight decline of 0.03% from its opening at 7.28557, with a session high of 7.29487 and a low of 7.27651. The market is consolidating after a sharp drop, showing limited momentum in either direction.
The moving averages (MA 5,10,30) indicate weak upside pressure, with shorter-term MAs flattening and price hovering around them. This suggests a lack of decisive trend continuation for now.
The MACD (12,26,9) histogram is fading, with the MACD line converging towards the signal line, pointing to waning bullish momentum. The lack of strong divergence suggests range-bound movement.
Immediate support lies at 7.27432, where buyers previously stepped in, while resistance is around 7.29487, aligning with the session high. A break below support could extend the downside, whereas a push above resistance may trigger renewed buying interest.
Traders will closely monitor upcoming US-China diplomatic engagements, as any talks between President Trump and President Xi could shift sentiment.
Additionally, the PBOC’s daily fixings and potential verbal intervention will be key to gauging the central bank’s tolerance for yuan depreciation.
With uncertainty lingering, USDCNH remains in a fragile state, with traders awaiting further clarity on trade policies and central bank action.
Official partners:
