Yuan threatens long-term low
USD/CNH today matched the September high at precisely 7.1965.
Given the dynamic with China re-opening, you would expect the yuan to be stronger but it’s not. The latest leg is no-doubt related to Hong Kong and potential sanctions and that’s partly natural but it could also be China sending a warning signal to the US.
Technical analysis on a chart like this is a bit of a canard because it’s manipulated. It’s not like there’s going to be some kind of runaway breakout like we saw in USD/CAD yesterday. There’s a daily trading range and it’s not going to suddenly break.
At the same time, allowing it to rise above 7.20 would be a powerful signal from Beijing.
No one has forgotten the August yuan freakout from 2015.