China's economy still requires continuous support from the government.

The Chinese yuan appreciated slightly after the People's Bank of China kept interest rates unchanged in the latest meeting. Additionally, there are indications that the central bank intends to maintain the yuan at a reasonable level and reduce speculative pressure. However, the yuan remains under pressure due to the strengthening U.S. dollar, which is bolstered by differing monetary policies. While the Federal Reserve has signaled its intention to keep interest rates steady in the upcoming meeting, other central banks are leaning towards more accommodative measures.

The People's Bank of China maintained its interest rates unchanged in the June meeting, in line with market expectations. The one-year Loan Prime Rate (LPR), a benchmark for most business and household loans, remains at 3.45%. Meanwhile, the five-year LPR, a reference for mortgage loans, remains at 3.95% after a 25 basis points cut in February.

The fragile economy and less-than-expected recovery have led to calls for more pronounced and additional support measures from the government. Pan Gongsheng, the governor of the central bank, stated that China will use various policy tools, including interest rates, to prevent excessive appreciation or depreciation of the yuan, and that supportive policies will continue.

New home prices in China dropped by 3.9% year-on-year in May, marking the largest decline since June 2015 and the 11th consecutive month of decline, despite recent real estate support measures. Furthermore, the continued decline in housing prices persists as both domestic and foreign demand have not increased significantly.

Chinese banks extended new loans worth over 950 billion yuan in May, up from 730 billion yuan in April but below market expectations of 1.3 trillion yuan. Meanwhile, total social financing, a measure of overall credit and liquidity, rose to 2.070 trillion yuan in the first five months of the year. Data from the central bank showed new loans totaling 11.14 trillion yuan, up 7.0% from the previous year, but the growth of outstanding credit remains at 9.3%, a record low.

Techical analysis data (5H)

Resistance: 7.2636, 7.2651, 7.2673

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.2577 - 7.26 but cannot break the support at 7.26, you may set a TP at approximately 7.2651 and SL at around 7.2563 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.2636 - 7.2651, you may set a TP at approximately 7.2673 and SL at around 7.2577 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.2636 - 7.2651 but cannot break the resistance at 7.2636, you may set a TP at approximately 7.2577 and SL at around 7.2673 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.2577 - 7.26, you may set a TP at approximately 7.2563 and SL at around 7.2651 or according to your acceptable risk.

Pivot point June 25, 2024 07:10 PM. GMT+7