USD/CNH remains below 10-week-old trendline despite trade optimism

• USD/CNH fails to recover amid on-going doubts over the Chinese fundamentals, PBOC easing.
• Traders seem to have ignored trade-positive headlines.

Although the US and China are gearing up for a successful trade deal, USD/CNH stays below near-term key resistance line (previous support) while taking rounds to 7.0683 during early Tuesday.

Not only the United States (US) President Donald Trump’s comments that the trade deal with China “coming along great,” but the White House Economic Adviser Larry Kudlow’s statement inflating odds of no December month hike to levies on Chinese goods also favored trade sentiment off-late.

Investors might have been worries about the mixed messages from the Chinese economic calendar, the latest being growth and industrial production numbers, coupled with the People’s Bank of China’s (PBOC) sustained emphasis on the easy money policy.

It should also be noted that further developments on the US-China trade front are hinged on the Chile APEC summit, scheduled for November where present geopolitical tensions raise doubts over the next month’s key meeting.

While no major data from either the US or China is up for publishing investors could continue searching for directions from the trade headlines.

Technical Analysis

Unless rising back beyond the 10-week-old ascending trend line, at 7.0768, prices keep being favorite to bears.