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Advance China GDP data and implications for USD/CNY
Invezz.com – The price rose on Monday morning as traders waited for the next GDP data from China scheduled for Tuesday of this week. The pair rose to a high of 6.87, a few points above Friday’s low of 6.8346.
China GDP preview
The Chinese economy appears to be doing better than expected according to some preliminary economic figures. On Monday, data revealed that the housing sector continued to recover after going through one of the worst crises on record. New home prices rose 0.5% in March, the fastest growth in 21 months.
The numbers came a few days after the country’s figures revealed that exports rose in March this year, even as companies continued to move operations elsewhere. Sales of electric vehicles in the country have also increased.
Another flah report from Nomura said that power consumption has risen sharply in recent weeks. It jumped 5.9% year-on-year in March.
The Upcoming Key CNY News will be the next China GDP data scheduled for Tuesday morning. These numbers will show if the economy recovered in the first quarter after the country abandoned its Covid-zero strategy.
Economists polled by Reuters expect the data to show the country’s GDP expanded 2.2% on a month after not registering any expansion in the previous quarter. This growth will then translate into a year-on-year increase of 4.0%, higher than the previous 2.4%.
China is expected to do well this year after the country reopens. In a report last week, the IMF said it expects the economy to grow 5.6% in 2022. That was a more optimistic report considering that the Beijing authorities have set a target of 5.0%.
USD/CNY chart analysis
TradingView USD/CNY chart
The daily chart shows that the USD/CNY exchange rate moved sideways on Monday morning. It has been holding steady at 6.87, where it has been for the past few days. The pair is consolidating at the 50-day and 25-day exponential moving averages. It is also between the 50% and 38.2% Fibonacci retracement levels.
Therefore, the pair is likely to continue to consolidate in the coming days as investors reflect on the Chinese and US economies. It will then break down as sellers target the key support at 6,820. A move above the resistance at 6.90 will invalidate the bearish view.
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This article was originally published by Invezz.com
