- The US GDP, trade meeting and FOMC are the key catalysts USD/CNH traders wait for.
- Prices dip beneath 21-DMA, aiming to revisit range support.
Following its another U-turn from 8-day old trading range, USD/CNH drops below 21-DMA while making the rounds to 6.8743 during early Thursday.
Even if Fed rate cut concerns are exerting downside pressure on the prices, traders remain cautious ahead of the key data/events scheduled for publishing from Friday onwards.
Among them, initial estimation of the US second quarter (Q2) Gross Domestic Product (GDP) will be the first one to entertain momentum traders whereas the next week’s US-China trade negotiations in Beijing and monetary policy meeting by the US Federal Open Market Committee (FOMC) can move markets afterward.
The quote slipped below short-term moving average on Wednesday as the US housing and activity data failed to extend previous optimism amid growing speculations of a 50 basis point Fed rate cut during next week’s FOMC.
The US GDP is likely to slip to 1.8% during Q2 after a notable 3.1% increase in the previous quarter.
Elsewhere, the US trade negotiators will reach China during next week for fresh discussions. Latest headlines suggest China remains ready to import more of the US agricultural products whereas the US is increasing efforts to help Huawei. Though, no actual actions have been noted, which in turn keep highlighting fears of no-deal between the world’s two largest economies.
Technical Analysis
Not only 6.87/89 but 6.86/90 also limits the quote’s near-term moves. However, sustained trading beyond longer-term moving averages portrays the pair’s strength.
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