With trade tensions between US and China brewing again US Dollar (USD) and Chinese Yuan (CNH) currency pair is back in focus as it tests resistance at 6.8500. Reports overnight have suggested that the US may increase tariffs on China from 10% to 25%. This has led to a fall in Chinese stock markets overnight as investors fear the ramifications of such a move. The fear has not yet spread to other stock markets as risk on mood prevails following a good earnings report from Apple yesterday.
USDCNH has slipped back from resistance and is trading at 6.8308. There is further resistance at 6.9000 followed by the 6.9400 area. Supports for the pair comes from the rising blue trend line at 6.7800 with the last touch on the line forming a higher swing low at 6.7747. Below this level with look to an earlier swing low at 6.7370. A loss of this point would lead to a retest of the 6.7000 round number with support not far below at the 6.6860 area. The 6.6500 level has been used as resistance on the run higher and is now a point of support with 6.6000 the major swing low on the 4 hour chart.