China's economy is showing signs of recovery once again.

The yuan has depreciated to more than 7.25 yuan per U.S. dollar, reflecting investor concerns about U.S. economic data, despite stronger-than-expected service sector PMI data. In China, a recent private sector survey found that the Chinese service sector continues to expand, signaling the fastest growth in a year. However, mixed economic data from China over the past week has led many analysts to believe that the recovery of the Chinese economy remains uneven and uncertain regarding future prospects.

Profits from various Chinese companies across multiple industries increased by 4.3% year-on-year, amounting to over 2,094.69 billion yuan in the first four months of 2024. The increase in profits demonstrates the government's ongoing efforts to maintain momentum and support domestic economic recovery amid continuous challenges such as weak domestic demand, deflation, and a real estate slowdown, which exert significant pressure on the overall economy.

Foreign Direct Investment (FDI) in China decreased by 27.1% year-on-year, amounting to 360.2 billion yuan in the first four months of the year. This sharp decline underscores investors' lack of confidence in the Chinese economy despite signs of improvement. Approximately 12.7% of the investment, totaling 45.7 billion yuan, was directed into high-tech manufacturing industries, while foreign investment in accommodations continued to rise rapidly at 65.1%.

The Manufacturing PMI rose to 51.7 in May, marking the seventh consecutive month of expansion in manufacturing activities and the fastest increase in two years due to increased output. However, export orders grew more weakly than expected due to a sluggish global economy. Meanwhile, employment declined for the ninth consecutive month.

The Services PMI increased to 54.0 in May, marking the 17th consecutive month of expansion in the service sector due to new businesses and export orders growing at the fastest rate in a year as domestic demand strengthened again with government support. Additionally, employment rose for the first time in four months, resulting in a slight increase in wages due to higher labor demand.

Techical analysis data (5H)

Resistance: 7.2463, 7.2487, 7.2499

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.2415 - 7.2428 but cannot break the support at 7.2428, you may set a TP at approximately 7.2487 and SL at around 7.2392 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.2463 - 7.2487, you may set a TP at approximately 7.2499 and SL at around 7.2415 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.2463 - 7.2487 but cannot break the resistance at 7.2463, you may set a TP at approximately 7.2415 and SL at around 7.2499 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.2415 - 7.2428, you may set a TP at approximately 7.2392 and SL at around 7.2487 or according to your acceptable risk.

Pivot point June 6, 2024 08:15 PM. GMT+7