- Offshore Yuan gains in Asia, keeping USD/CNH in a falling channel.
- China’s Industrial profits tanked by nearly 35% in March.
- A channel breakout would revive uptrend from the March 9 low.
Offshore Yuan or CNH is drawing bids and pushing USD/CNH lower on Monday despite the horrible China data.
The pair is trading at session lows near 7.0810, representing a 0.12% drop on the day, having hit a high of 7.0912 in early Asia.
China’s industrial profits fell by 34.9% year-on-year to 370.66 billion Yuan in March, the statistics bureau said on Monday. Profits declined by 38.3% in the January-February period – the steepest decline since 2010, according to Reuters.
The slide in corporate profits has so far failed to have any impact on the USD/CNH pair. The CNH’s resilience indicates the markets are likely done pricing the coronavirus-led slowdown in the economic activity.
Trapped in a falling channel
The pair is stuck in a bearish channel, as represented by trendlines connecting March 19 and April 2 highs and March 25 and April 10 lows.
A move through the top end of the channel, currently at 7.10, would confirm a breakout or a continuation of the rally from the March 9 low of 6.9042 and open the doors to re-test of recent highs above 7.15.
Technical levels
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