Piotr Matys, EM FX Strategist at Rabobank, notes that the selling pressure on the CEEMEA currencies has eased amid signs of stabilisation in the Chinese yuan.
Key Quotes
“After the yuan plunged to yet another year-to-date low, PBoC Governor Yi Gang reportedly said that China is closely watching recent FX fluctuations and aims to keep its currency at an equilibrium level.”
“Today’s session could prove crucial for USD/CNY from the perspective of technical analysis and consequently for the CEEMEAs.”
“USD/CNY set an intraday high at 6.7214 before it fell to 6.6592 low on the back of comments from Chinese officials who offered the yuan their support. The price action implies that a shooting star could potentially form on the daily USD/CNY chart.”
“A shooting star is a bearish chart pattern that would indicate that USD/CNY has reached an important short-term top following its parabolic move higher over the past few weeks from around 6.40. We are already witnessing a positive impact of a stable USD/CNY as both USD/CEEMEAs and EUR/CEEMEAs are leaning lower so far today.”
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