USD/CNH clings to gains amid US-China tussle, all eyes on Chinese trade data

• The US stops government departments from buying equipments from top Chinese companies, including Huawei.
• The US-China trade meeting in September is still on the card.
• July month trade data from China and the dragon nation’s response to the US action will offer fresh impulse to market players.

While extending its previous day’s recovery, the USD/CNH pair takes the bids to 7.0864 ahead of China’s trade numbers, up for publishing on early Thursday.

Even if a pullback in the People’s Bank of China’s (PBOC) Yuan fix dragged the quote from the record high on Tuesday, increase in the rate from 6.9683 to 6.9996, coupled with harsh statements from Chinese media, again pushed the quote to the north on Wednesday.

However, news that the September month trade meeting between the US and China is still likely and the PBOC turning down reports of it slashing benchmark borrowing and lending rates kept prices in check.

During early Asian morning, Financial Times rolled out the news that mentions the Trump administration ordered the US government agencies to stop buying equipments from top Chinese companies like Huawei, ZTE, Hikvision, Dahua, and Hytera on national security grounds.

Knowing the Chinese media’s readiness to criticize the US measures, investors await the dragon nation’s response to the latest salvo from the Trump administration. Also on the market's radar will be the PBOC fix and China’s July trade numbers.

Technical Analysis

Considering overbought conditions of 14-bar relative strength index (RSI) prices can revisit 7.0000 psychological magnet on the break of 7.0400 immediate support whereas 7.1000 and 7.1400 can flash on bulls’ radar during further upside.