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Trading Review

During Asian hours on Monday (August 14), the intermediate price of USDCNH is near 7.1686, up 99 basis points compared with the previous value. Last week, the yuan fluctuated upward to 7.24 mark from 7.19, and its depreciation continued after it rose to 7.20 mark on Tuesday. Today, the yuan has once again approached the former high of 7.2850. Last Tuesday's intermediate price perhaps confuses investors, it was adjusted to 7.1565 from 7.1365, and its market is hard to maintain the exchange rate stability. The 7.20 mark is not important anymore. China's stock market northward funds last week see a net outflow of 5 consecutive days, and the following release of the July import and export data is also less than expected. The depreciation is more fluid. This morning, the highest depreciation is to 7.2810, near the former high of 7.2850. Perhaps the logic of the trend of the yuan needs to be readjusted, and the data in August is likely to be worse. It is necessary to release some depreciation pressure first. If the intermediate price is above 7.20, perhaps the CNH will be near 7.30. From the weekly perspective, the CNH is still in 6.7-7.29, and breaking through it may also be difficult. In the next period, it may still fluctuate at a high level, and there is not much room for surging.

As for the data, China's July CPI fell 0.3% year-on-year, expected to fall 0.5%, and the previous value was flat. China's July PPI fell 4.4% year-on-year, expected to fall 4.1%, and the previous value fell 5.4%; It was down 0.2% month-on-month. In July, RMB loans was increased by 345.9 billion yuan, 349.8 billion yuan less than a year-on-year increase; at the end of July, the balance of the broad money (M2) was 285.4 trillion yuan, an increase of 10.7% year-on-year. In July, the amount of social financing increased by 528.2 billion yuan, 270.3 billion yuan less than the same period last year. At the end of July, the stock of social financing was 365.77 trillion yuan, up 8.9% year-on-year. In July, China's imports and exports were 482.92 billion dollars, down 13.6%. Among them, the exports was 281.76 billion dollars, down 14.5%; the imports was 201.16 billion dollars, down 12.4%; the trade surplus was 80.6 billion dollars, narrowed by 19.4%.

Trend Analysis

In the daily chart, the 5-day moving average maintains above the 10 and 20-day moving averages. The moving average also continues to diverge upward. In the short term, the USD/RMB bulls continue to dominate, but from the graphical trend, there will be signs of double tops in the stage. The upper resistance initially is set at the former high of 7.2850, and the lower support initially is set at 7.2450 on the 5-day moving average.

Today's trading plan is to sell at highs. You can go short with small positions after the price rise to 7.2850. The stop loss is set at 7.3000, the first target is set at the take profit of 7.2450 on the 5-day moving average, the remaining positions are set to breakeven, and the second target is set at the support of 7.2150 on the 10-day moving average.

Trading Recommendations

Trading direction: Short

Entry price: 7.2880

Target price: 7.2150

Stop loss: 7.3000

Support: 7.2450, 7.2150

Resistance: 7.2850, 7.3000