USDCNH Cleary Below Support
Further appreciation in the Renminbi seems reasonable with the break of long term declining channel we have been reviewing. Following yesterday’s better than expected GDP and Production data from China, the bid is in the Yuan from a political, speculative (due to the better data) and now technical perspective and it will be interesting to see how much China can/will slow the appreciation.
AUDUSD Touches Trendline Resistance
The AUDUSD pair had touched 6 month old trendline resistance helped by a better than expected GDP reading out of China and a well subscribed Spanish bond auction. On the chart below we see the wedge closing with steep trendline support and the trending 21 day mavg crossing above the 100day, a break above could quickly lead toward the October highs in the middle of the 1.07 handle.
Westpac Consumer Confidence
The Aussie Westpac Consumer Confidence reading for January rose by 2.4% after a decline of -8.3% the prior release. The Index also rose to 97.1 from the prior reading of 94.7. The AUD and other risk pairs rose marginally following the positive release.
Germany’s Merkel and Roesler on the Wires
- Merkel said to tell lawmakers Greek contagion danger receding
Roesler Says:
- Relaxed about S&P downgrade on EFSF
- Market has ‘decided otherwise’ to S&P
- S&P is only one rating company
- Must move quickly toward stabily pact
- No plan to contribute more to EFSF
- Not at all in danger of losing AAA rating
China’s Industrial Production
Industrial Production also beat expectations (as did GDP) helping the markets risk profile. The Euro continues to hold a bid above 1.27.
- Industrial Production YTD (YoY) – Survey:13.8% Â Actual:13.9% Â Prior:14.0%
- Industrial Production (YoY) – Survey:12.3% Â Actual:12.8% Â Prior:12.4%
China’s Real GDP & Retail Sales
China’s GDP reading beat expectations and erased the Yuan’s earlier losses, pushing risk higher and the EURUSD through the 1.27 handle.
- Real GDP YTD (YoY) – Survey:9.2% Â Actual: 9.2%Â Prior:9.4%
- Real GDP (QoQ) – Actual:2.0% Â Prior:2.3%
- Real GDP (YoY) – Survey:8.7% Â Actual:8.9% Â Prior:9.1%
- Retail Sales YTD (YoY) – Survey:17.0% Â Actual:17.1% Â Prior:17.0%
- Retail Sales (YoY) – Survey:17.2% Â Actual:18.1% Â Prior:17.3%
USDCNH Continuing to Hold Descending Trendline
USDSGD To Retest Support?
The USDSGD pair looks to be bearing down again on trendline support and it will be interesting to see if another bid could be found, or will risk take over and will the pair retest the 100day moving average for the first time since October.
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