- USD/CNH’s has pulled back from four-monnth highs with Trump renewing hopes of trade deal.
- The pair, however, is still trading above the 200-day average.
USD/CNH is currently trading at 6.8340, havinng hit a high of 6.8638 – a level last seen on Jan. 8 – on Thursday.
Thre pair had jumped to four-month high on escalating trade tesnions. Trump, while speaking at a rally in Florida on Wednesday, accused China of breaking the trade deal and vowed not to back down until China stopped cheating American workers. Trump’s comments boosted fears of a full blown-trade war between the US and China, sending CNH, AUD and other risky asstes lower.
The S&P 500, which was down as much as 1.5% in early trade on Thursday, ended with 0.3% losses. Meanwhile, USD/CNH pulled back fro four-month highs to close at 6.8342.
The recovery in CNH and stocks happened after President Trump informed markets on Thursday that he recieved a beautiful letter from his Chinese counnterpart, urging for joint effort to resolve trade diferences. That provided markets a hope that the two sides can still reach a trade deal.
That said, the pair is still trading above the crucial 200-day moving average (MA), currently at 6.8241, representing a 1.53% gain on a weekly bbasis, the biggest since June 2018.
It is worth noting the rally started on Monday after Trump threatened over the weekend to slap higher tariffs on more Chinese goods, pouring cold water optimism generated by both Washington and Beijing’s repeated claims of progress.
Technical Levels
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