Chinese Yuan jumps sharply on talks that US officials are considering removing the 15% tariffs on USD 112B worth of Chinese goods, put to effect back on September 1. In return, the Financial Times said that US would demand stronger intellectual property protections. If realized with the phase one trade deal, that would be the first real de-escalation of tariff war between US and China.
USD/CNH (off-shore Yuan), breaks through 7 handle for the first time since August. It’s now pressing 6.990 cluster support (38.2% retracement of 6.670 to 7.185 at 6.994. We’d look for strong support from current level to, at least bring recovery attempt. However, sustained break will be significant near term bearish development. Deeper fall would be seen to 61.8% retracement at 6.871 and possibly below.
