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USD/CNY rose strongly and approached key resistance at 7.3274, the 2022 high. Economists at Credit Suisse offer an analysis of the pair’s outlook.
Stocks face further downside risk
The strong rise in USD/CNY is now approaching the important 2022 high of 7.3274. While we believe this high should be taken seriously and be wary of a possible reversal to the downside, the next key technical resistance at 7.47/7.50 will not appear until the next key technical resistance at 7.47/7.50 if upside momentum continues to be strong.
We need to note that a rise in USD/CNY (i.e. a weaker CNY) is usually correlated with a fall in equities, which further reinforces the existing top we are currently seeing in the Shanghai Composite Index.
