USDCNH turns upwards after China data disappointment

The Yuan has come under pressure in early trade today, driven primarily by a raft of concerning economic data points out of China. From a growth perspective, the year-on-year GDP figure of 6.3% came well below the 7.1% widely forecast. Meanwhile, underwhelming declines in both fixed asset investment and retail sales dampened the outlook for growth going forward. The Chinese have been hoping that domestic consumption could drive a fresh resurgence following the prolonged period of zero-covid lockdowns. This retail sales number does raise fresh doubts over that prediction.

While the dollar has found itself under pressure of late, the rebound that appears to be underway for USDCNH comes from a notable confluence of trendline and Fibonacci support. This could bring a potential bullish turn for the pair. As such, watch for a potential move upwards in the coming days, with a move back below 7.10395 required to signal a bearish continuation.