China also decides to raise import tariffs.

The Chinese yuan weakened slightly after China announced import tariff measures on multiple U.S. goods, raising concerns about a trade war between the world's two largest economies. This move is a retaliation against the U.S.'s decision to impose an additional 10% tariff on Chinese imports, which takes effect today. Meanwhile, President Trump has postponed imposing tariffs on imports from Mexico and Canada by one month following successful negotiations aimed at enforcing border security laws and addressing concerns over immigration and drug smuggling, which have become a national issue in the U.S.

China announced on Tuesday that it would impose a 10% tariff on U.S. imports in response to President Donald Trump's 10% tariff on Chinese goods. China's Ministry of Finance stated that it would levy an additional 15% tariff on U.S. coal and LNG, and a 10% tariff on crude oil and certain automobiles, effective from February 10. Additionally, China's market regulatory authority has launched an investigation into Google for alleged violations of the country’s anti-monopoly laws.

However, reports indicate that U.S. President Donald Trump is set to speak with Chinese President Xi Jinping this week as both nations work towards reaching an agreement to avoid escalating trade tensions that could have widespread consequences. The upcoming negotiations are expected to be more direct, with a focus on strengthening international cooperation while prioritizing tariff-related discussions, which have not yielded any benefits for either country. Furthermore, China remains firm in its decision to file a complaint with the World Trade Organization (WTO) after the week-long Chinese New Year holiday.

The People's Bank of China (PBoC) has kept interest rates unchanged for the third consecutive month in January, in line with market expectations. The one-year Loan Prime Rate (LPR), a benchmark for corporate and household lending, remains at 3.1%, while the five-year LPR, used as a reference for mortgage loans, stands at 3.6%. However, the latest decision comes amid continued pressure on the yuan, limiting the central bank's ability to implement further monetary easing policies to slow the currency's depreciation.

The yield on China's 10-year government bonds remained stable at around 1.64%, reflecting investor concerns following the release of economic data and potential trade tensions following tariff hikes by both China and the U.S. Additionally, investors are closely watching Trump’s policy announcements and the Federal Reserve’s decision on interest rates in its upcoming meeting. Meanwhile, the PBoC has injected a significant amount of liquidity to maintain market stability and support long-term economic growth.

Techical analysis data (5H)

Resistance: 7.1923, 7.2028, 7.2081

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.1712 - 7.1765 but cannot break the support at 7.1765, you may set a TP at approximately 7.2028 and SL at around 7.1607 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.1923 - 7.2028, you may set a TP at approximately 7.2081 and SL at around 7.1712 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.1923 - 7.2028 but cannot break the resistance at 7.1923, you may set a TP at approximately 7.1712 and SL at around 7.2081 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.1712 - 7.1765, you may set a TP at approximately 7.1607 and SL at around 7.2028 or according to your acceptable risk.

Pivot point February 4, 2025 10:33 PM. GMT+7