USD/CNY: A move to fresh 15-month high remains elusive

• China retail sales and industrial production figure missed estimates, the money supply increased more than expected in July, still, CNY is showing signs of life.
• USD/CNY has backed-off from the session high of 6.8954. Thus, a break to fresh 15-month highs above 6.8965 remains elusive.

Currently, the USD/CNY pair is trading at 6.8826, having clocked a high of 6.8954 earlier today.

The official data released earlier today showed China M2 money supply increased 8.5 percent year-on-year in July, beating the forecasted rise to 8.2 percent from the June figure of 8.0 percent.

Further, the industrial production rose 6 percent year-on-year in July, missing the estimated figure of 6.3 percent and the retail sales came in at 8.8 percent vs 9 percent expected.

What’s more, the People’s Bank of China (PBOC) announced the yuan reference rate at 6.8695, the weakest fix since May 26, 2017.

However, despite all the negatives, the USD/CNY has failed to print fresh 15-month highs above 6.8965 (Aug. 3 high).

Looking forward, the currency pair could pick up a bid and rise above 6.8965 if the Turkish lira resumes the slide, sending CNY and other risky assets lower.

USD/CNY Technical Levels

Resistance: 6.8954 (session high), 6.8965 (Aug. 3 high), 7.00 (psychological level)

Support: 6.8680 (previous day’s low), 6.83 (Friday’s low), 6.7950 (Aug. 8 low)