Economic Growth in China slowed down; according to new data released, China is showing a decline in the speed of growth in retail sales, a fall back in the growth of Industrial Production, and a steep decline in new home prices. Youth unemployment also increased to nearly 20%.
China's Retail Sales were expected to increase to 5% but instead declined to 2.7%, Analysts anticipated Industrial Production to be 4.6%, but the actual data showed 3.8%, strengthening the USD against the Yuan.
Later this week, the US will announce economic data that will bring high volatility to the exchange rate of USDCNH. On Wednesday, the US will announce Retail Sales, which are expected to decrease from 8.4% to 8.1%. Later that day, FOMC Minutes will be released, giving us a good gauge of where the FOMC stands after the US Inflation Rate decreased last week.
The price broke three important resistance levels on our Fibonacci retracement and reached a three-month high in today's trading session. The pair could face a price correction in short to medium term.
The Bollinger bands started to open up aggressively; we expect higher volatility in the upcoming days. USDCNH is trading above the upper band, suggesting that the price is relatively high, but if the bands continue to expand, we could see the price continue rallying.
The relative strength index is currently at 63%, giving the pair a bit more room to continue rising; however, the price could reach an overbought status very soon, likely changing the market sentiment.
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