USD/CNH Signals & Technical Analysis
About the USD/CNH (US Dollar and Chinese yen)
The USD/CNH pair is the abbreviated term used for US Dollar and Chinese yen. the US Dollar and Chinese yen do not have a nickname. Before we get into the particulars, what exactly does USD/CNH rate mean? The exchange rate tells you how many China's national currency (the quote currency) are required to purchase one US Dollar (base currency). For example, if the pair is trading at 6.73, it means it takes 6.73 Chinese yen to buy 1 US Dollar.
The USD/CNH exchange rate has been on a bullish trend in recent months, reaching a high of 7.1965 on June 15, 2023. This is due to a number of factors, including:
- The strengthening of the US dollar against other major currencies
- The slowdown in China's economic growth
- The widening of the US-China trade deficit
Looking ahead, the USD/CNH exchange rate is expected to remain on a bullish trend. However, there are a number of factors that could weigh on the currency pair, including:
- A slowdown in the US economic growth
- A trade war between the US and China
- A depreciation of the Chinese yuan
USD to CNY Forecast
The USD to CNY exchange rate is expected to trade between 7.00 and 7.20 in the coming months. However, there is a risk that the currency pair could break out of this range if there are any major changes in the economic or political landscape.
Key Levels to Watch
- Support: 7.00
- Resistance: 7.20
Breaking Down USD/CNH
The United States dollar, or the American dollar, is the official currency, or money, of the United States of America and is also used in a number of different countries across the border. It is also the standard money for global markets selling goods such as gold and oil (fuel). While writing, the symbol for the American dollar is the dollar sign ($). Dollars can also be known as USD (U.S. Dollar).
The renminbi (RMB, ¥; code: CNH;) is the currency of the People's Republic of China. It is the official currency used in China. Sometimes You can use this currency in Hong Kong and Macau and in those areas you can exchange very easily. The currency is published by the People's Bank of China, the financial authority of China. Its name means "people's currency"
USD/CNH is the eighth most traded currency pair and the most popular CNH pair. USD/CNH pair is one and the only pair in the top 30 most traded ranked Overall, CNH is the ninth most traded currency
Correlation is merely a mutual relationship or connection between two or more things.
Positive correlation – The positive relationship merely is when pairs move in tandem with each other.
In the forex world, the SEK/JPY, USD/PLN, and AUD/USD currency pairs are positively correlated
Negative correlation – In contrast, a negative relationship is when forex pairs move in the opposite direction, For example, SEKJPY, AUDUSD, and EURJPY
The U.S. Dollar vs. the offshore Chinese Renminbi. The Renminbi (CNH) is the designation used when the currency is traded offshore. It usually referred to as the Yuan and uses the letters CNY when traded inside China. China is the world’s second-largest economy behind the U.S. but is the world’s largest exporter.
Economic Events: The movement in the US Dollar economic and Chinese yen events determine the exchange rates. Top of the line economic events includes GDP, Employment Change, Industrial Production, and Consumer Price Index. Better than forecast data increases the demand for related currency and impacts the value of either the US Dollar and Chinese yen, causing fluctuations in the USD/CNH exchange rate.
Major Economic Events
Gross Domestic Product – the gross domestic product is the central measure of economic growth in the region.
Employment Change – The Sterling is also sensitive to changes in employment, as slacks in the labor market causes a drop in Inflation rates.
Consumer Price Index – Since one of the goals of the BOP is to maintain price stability, they keep an eye on inflation indicators such as the CPI. If the annual CPI deviates from the central
Industrial Production – This measures a change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.
Political Events - Another critical factor is the political aspect. Instability, as seen in the Brexit referendum, can entirely change the direction of the currencies. So, stay up-to-date on the latest political and economic news.
What Determines the USD/CNH exchange Rate?
Several factors can impact the USD/CNH rate valuation, including:
FRS & PRC Monetary Policies: Federal Reserve System & the People's Bank of China control the supply of money in the market, to keep the economy on track. A dovish policy, which is also known as expansionary policy, from either of the central banks, weakens the related currency. In contrast, a hawkish monetary policy (contractionary policy) strengthens the currency
The USD/CNH is traded in amounts denominated in the US Dollar.
Standard lot Size: 100,000
Mini lot size: 10,000
One pip in decimals 0.0001
Pip Value: $1.48