China may have additional economic stimulus policies after the inflation rate decreased.

The yuan began to stabilize after a rapid depreciation on Wednesday, still largely influenced by the pressure of the dollar. However, the domestic inflation rate, which has returned to a downward trend, has led investors to hope that China's central bank may implement additional monetary easing policies to further boost the economy. This comes after a slight downturn following the Chinese New Year. Investors are now watching China's trade balance figures closely this Friday.

China's inflation rate increased by 0.1% on a yearly basis in March, following a 0.7% increase in the previous month. The slowdown in inflation is due to the impact of the recent Chinese New Year. The non-food inflation rate decreased slightly, while food prices decreased significantly due to lower pork and fresh vegetable costs after increasing in February. This resulted in a basic inflation rate, excluding food and energy prices, increasing by 0.6% on a yearly basis, down from 1.2% in the previous month.

Fitch Ratings revised China's credit outlook from Stable to Negative amid growing concerns about the country's economic trajectory, particularly the shift from property-led growth to infrastructure development. This has led to significant fiscal imbalances and increased government debt over the past few years, affecting credit ratings and confidence.

The Services PMI increased for the first time in three months to 52.7 in March, marking the 15th consecutive month of service activity growth. New business expansion was rapid, mostly driven by new export orders. However, input costs rose due to higher raw material, labor, and transportation costs, exceeding long-term trends slightly.

Manufacturing PMI increased to 51.1, marking the fifth consecutive month of factory activity growth and the fastest growth since last year. This was driven by increased new orders both domestically and internationally, with the highest increase in foreign sales in a year. However, hiring decreased again, indicating increased caution among companies to control costs. Slight decreases in raw material prices allowed companies to lower product prices to stimulate demand.

Techical analysis data (5H)

Resistance: 7.2377, 7.2381, 7.2388

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.2361 - 7.2367 but cannot break the support at 7.2367, you may set a TP at approximately 7.2381 and SL at around 7.2356 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.2377 - 7.2381, you may set a TP at approximately 7.2388 and SL at around 7.2361 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.2377 - 7.2381 but cannot break the resistance at 7.2377, you may set a TP at approximately 7.2361 and SL at around 7.2388 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.2361 - 7.2367, you may set a TP at approximately 7.2356 and SL at around 7.2381 or according to your acceptable risk.

Pivot point April 12, 2024 09:47 PM. GMT+7