Here we can see the tight range we have been trading since Feb. It is clear that volatility across the FX board has faded, notably in JPY and KRW.
With that said, I believe the downside to owning CNH is becoming very limited and its highly likely authorities will step in to stabilise the CNH to keep a stronger currency.
If we look ahead in the macro calendar this week, Credit growth, CPI and trade balances are all out and I share a more bullish view than market expectations for the prints.
I am recommending USDCNH sells with a structural bullish view on CNH strengthening in trade weighted basket terms.
The risk to my thesis is a downside surprise in Chinese data... let's see how it goes. Best of luck all those positioning or already loaded.