China is trending towards future economic support policies.

The yuan remains stable due to investor anticipation of potential easing measures by the People's Bank of China. Speculations suggest a reserve requirement ratio cut could begin before the upcoming Chinese New Year on January 28, aiming to stimulate increased lending and support liquidity during the holiday season. Investors are also monitoring China's Q4 GDP and industrial production updates for insights into potential additional government support.

China's new loans extended in December exceeded 990 billion yuan, higher than the expected 850 billion yuan, driven by rapid credit demand. Various government stimulus measures, including increased bond issuances and overall credit support, contributed to this surge. However, the figure is slightly below the 1.17 trillion yuan from the previous year. Social financing, which measures credit and economic system liquidity, including capital raising methods like initial public offerings, trust loans, and bond sales, rose to 2.86 trillion yuan, indicating renewed domestic economic objectives.

China's trade surplus with the US surged to $104.84 billion in December, up from $75.31 billion the previous year, marking its highest surplus since February. This was bolstered by increased exports, which reached a 27-month high of $230.79 billion, up 1.0% from November, amidst year-end demand and anticipated US export restrictions on semiconductor chips. Imports mainly focused on advanced technology products and continued strong demand for commodities like gold and other metals.

Exports from China increased by 10.7%, following a 6.7% growth the previous month, marking nine consecutive months of export growth. Agricultural products and plastic products dominated the export composition, with total sales for 2024 rising by over 5.9% to $3.58 trillion USD. Machinery exports, along with other metals, also showed consistent growth.

China's inflation rate decreased to 0.1% year-on-year in December, down from 0.2% in the previous month, reflecting continued economic risks despite government economic stimuli and liquidity measures. Food prices decreased slightly by 0.5%, while core inflation excluding food and energy increased by 0.4% year-on-year, reaching a five-month high.

Techical analysis data (5H)

Resistance: 7.3328, 7.3332, 7.3338

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.3312 - 7.3318 but cannot break the support at 7.3318, you may set a TP at approximately 7.3332 and SL at around 7.3308 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.3328 - 7.3332, you may set a TP at approximately 7.3338 and SL at around 7.3312 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.3328 - 7.3332 but cannot break the resistance at 7.3328, you may set a TP at approximately 7.3312 and SL at around 7.3338 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.3312 - 7.3318, you may set a TP at approximately 7.3308 and SL at around 7.3332 or according to your acceptable risk.

Pivot point January 16, 2025 09:26 PM. GMT+7