- President Trump delays tariff hikes by two weeks, sending China’s Yuan to three-week highs against the US Dollar.
- USD/CNH could drop further, as the 4-hour chart is now reporting pennant breakdown.
The bid tone around China’s offshore Yuan (CNH) strengthened, pushing the USD/CNH pair to three-week lows after the US President Trump delayed the move to hike tariffs on $250 billion worth of Chinese goods (from 25% to 30%) to Oct. 15 from Oct. 1.
As of writing, the USD/CNH pair is trading at 7.0907, the lowest level since Aug. 23.
With the drop to four-week lows, the pair has confirmed a pennant breakdown on the 4-hour chart. That bearish continuation pattern indicates the consolidation (narrowing price range) has ended and the pullback from the recent high of 7.1956 has resumed.
So, the support at 7.05 could come into play in the next day or two. The outlook would turn bullish if the pair finds acceptance above 7.1317 (pennant high), although, as of now, that looks unlikely.