China’s inflation rate rises again.

The Chinese yuan appreciated slightly as investors assessed the impact of rising global trade tensions. Reports from the United States indicate that President Donald Trump’s proposed tariff hikes could be implemented as early as Thursday. These include a 10% tariff on Chinese imports and an additional 25% tariff on steel and aluminum. However, discussions between President Trump and Chinese President Xi Jinping may ease or delay the impending trade tariffs. Meanwhile, the Chinese government is considering a 50 billion yuan stimulus package to support the real estate sector, which has been experiencing a continuous slowdown.

China’s manufacturing PMI stood at 50.1 in January, marking four consecutive months of expansion in manufacturing activity. However, growth momentum is slowing as foreign orders declined for the second straight month amid rising global trade challenges, particularly U.S. tariff hikes on Chinese imports. Employment also saw its steepest decline since 2024. In terms of production costs, raw material prices remained stable, while product selling prices dropped at a faster rate. Dr. Wang Zhe, a senior economist at Caixin Insight Group, noted that policies implemented over the past year have begun to yield tangible results.

China’s annual inflation rate surged to 0.5% in January from 0.1% in December, exceeding market expectations of 0.4%. The increase was driven by the Lunar New Year holiday at the end of the month, which boosted domestic demand and trade activity. The inflation rise also reflects the effects of recent government stimulus measures and monetary policies supporting the economy. Food prices showed a slight recovery, with pork prices rising by 13.8% and fresh vegetable prices increasing by 2.4%. Meanwhile, core consumer price inflation, which excludes volatile food and energy prices, rose by 0.6% year-on-year, marking its highest level in seven months.

China’s foreign exchange reserves edged up to $3.209 trillion in January, despite the yuan depreciating by 0.7%, while the U.S. dollar remained largely unchanged. Meanwhile, China’s gold reserves increased to 73.45 million troy ounces from 73.29 million in the previous month, raising their value to $206.53 billion from $193.43 billion, in line with the surge in gold prices. This indicates that China continues to accumulate gold as part of its reserve strategy.

China’s State Council announced on Monday that it will implement policies to promote domestic consumption, emphasizing the importance of stabilizing investment, which is crucial for job creation. In its latest weekly meeting, the government outlined plans to boost citizens’ income and promote sustainable income growth. Key investment areas include culture, tourism, and sports. Analysts predict that the government will expand pension coverage in March. The meeting also revealed economic growth targets for 2025 alongside other supportive policies.

Techical analysis data (5H)

Resistance: 7.3038, 7.3188, 7.3292

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.268 - 7.2784 but cannot break the support at 7.2784, you may set a TP at approximately 7.3188 and SL at around 7.253 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.3038 - 7.3188, you may set a TP at approximately 7.3292 and SL at around 7.268 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.3038 - 7.3188 but cannot break the resistance at 7.3038, you may set a TP at approximately 7.268 and SL at around 7.3292 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.268 - 7.2784, you may set a TP at approximately 7.253 and SL at around 7.3188 or according to your acceptable risk.

Pivot point February 14, 2025 09:56 PM. GMT+7