USD/CNH Provides Excitement, Stocks Higher Again

 

A  quiet day in Asia for G10 with only USD/CNH providing some excitement. Stocks continue their march higher ahead of central banks and expected China easing. 

Asia G10 FX

A generally range bound day for currencies in Asia with AUD, EURO and USDJPY trading around their mid-range points of 0.7500, 1.1000 and 106.00 respectively.

NZD has managed a somewhat asthmatic rally to 7060 on the session boosted by a slightly better than expected milk price auction. Nevertheless ahead of the expected dovish economic update from the RBNZ tomorrow, it would be a brave man to turn rampantly bullish on Kiwi.

CHINA

USD/CNH has provided some interest today with the PBOC setting the fix below 6.7000 again causing a washout of short-term long positions. USDCNH dropped 200 points in a straight line to 6.6900 before buyers emerged. The bounce was no doubt helped by Chinese planning agency, the NDRC downgrading their CPI forecast to 2% for 2016 vs an official target of 3%. This has kept the China easing trade well in play and limited USDCNH downside.

HANG SENG

This gave a fillip to China stocks with the Hang Seng up 1.3% midday on the China easing play. The Hang Seng is now well and truly ensconced within the weekly Ichi moko cloud. We do have some important weekly resistance just above here at 22072, the 38.2% fibo retrace. A weekly close above will target the 23000 area. Note though the 100 and 200-week moving averages and the 50 % fibo retracement all lie in this region.

HK33

 

AUSTRALIA 

The ASX continues its march higher. Shrugging of disappointing results from BHP Billiton and Rio Tinto in the last two days. Clearly again, the China easing story continues to drive prices in commodity (read metals) related stocks despite the less than stellar supply set up in the markets.

The ASX is well above the weekly cloud now targeting the 61.8% fibo retrace at 5530, with support at 5370, the top of the weekly cloud and the 200-week moving average.

ASX20JULY

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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