USD\/CNH traded slightly higher near 6.8905 in early European dealings on Tuesday. Price stayed below the 100-day EMA, keeping the trend biased to the downside.<\/p>\n
US tariff news remained in focus after Donald Trump said he would lift a tariff from 10% to 15% on US imports from all countries, the maximum allowed under the law. This followed a US Supreme Court decision on Friday that struck down his broad global tariffs.<\/p>\n
Trump also warned on Monday that countries should not back away from recently negotiated US trade deals. He said higher levies could be applied under other trade laws.<\/p>\n
In China, the PBoC kept its Loan Prime Rates unchanged on Tuesday, as expected. The one-year LPR stayed at 3.00% and the five-year LPR remained at 3.50%.<\/p>\n
On the chart, USD\/CNH remained under the 100-day EMA and the 20-day Bollinger midline. The RSI (14) was 31.7, near oversold.<\/p>\n
Support was near the lower Bollinger Band at 6.8680, with resistance near 6.9155. A further resistance level was noted at the upper band around 6.9633.<\/p>\n
Looking back to 2025, our analysis highlighted a bearish outlook for USD\/CNH, with the pair trading near 6.8905. This view was driven by renewed US tariff threats and technical indicators showing the price holding firmly below its 100-day moving average. The expectation at the time was for the pair to test lower support levels.<\/p>\n
That bearish sentiment from last year has now shifted due to diverging economic policies. While China\u2019s economy is showing signs of resilience, with exports in December 2025 beating expectations by rising 2.3% year-on-year, its central bank is actively easing. In contrast, the US Federal Reserve has maintained a hawkish stance, keeping interest rates elevated.<\/p>\n
This policy divergence was confirmed this week when the People’s Bank of China cut its five-year loan prime rate by a record 25 basis points to 3.95%, a significant move to support its economy. This action widens the interest rate gap with the United States, where the benchmark rate remains above 5.25%. A wider rate differential historically favors holding US dollars over yuan.<\/p>\n
Given these conflicting signals\u2014a resilient Chinese export sector versus aggressive monetary easing\u2014the clear directional bet from 2025 is no longer prudent. The wide interest rate differential provides a strong floor for USD\/CNH, making further significant downside unlikely in the near term. This suggests that any strength in the yuan might be short-lived.<\/p>\n
Therefore, for the coming weeks, derivative traders should consider strategies that benefit from range-bound action or a potential grind higher in USD\/CNH. Selling out-of-the-money puts could be a viable strategy to collect premium, capitalizing on the view that the pair is unlikely to break significantly lower. Alternatively, a cautious bull call spread could offer a low-cost way to position for a gradual move back toward its 100-day moving average.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/CNH edges up near 6.8905; bearish below 100-day EMA as tariffs and PBoC rates dominate.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42677","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/42677","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=42677"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/42677\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=42677"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=42677"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=42677"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}