China is likely to continue economic stimulus policies.

The Chinese yuan has continued to depreciate over the past week amid growing concerns about the effectiveness of China’s stimulus measures in counteracting U.S. tariffs, which are expected to put ongoing pressure on China’s economy. While China has set a GDP growth target of 5% and unveiled plans to boost domestic consumption and demand, the economy continues to face sluggish growth. However, investors felt some relief after President Xi signaled a more targeted approach to tariff measures.

The People's Bank of China (PBoC) kept interest rates unchanged for the fifth consecutive month during its March meeting, in line with market expectations. The one-year Loan Prime Rate (LPR), a benchmark rate for business and household loans, remained at 3.1%, while the five-year LPR, a reference rate for mortgage loans, stayed at 3.6%. However, the central bank is expected to cut interest rates and the reserve requirement ratio at an appropriate time to support the slowing economy. Meanwhile, additional stimulus measures were introduced earlier this month to boost domestic demand and consumption, aiming to mitigate the impact of rising U.S. tariffs.

The PBoC expects China’s employment to remain stable this year, despite challenges in job creation. Minister of Human Resources and Social Security Wang Xiaoping stated on Sunday that the government will expand job opportunities in key sectors, targeting the creation of over 12 million new urban jobs. The focus will be on advanced manufacturing, and additional policies will be introduced to support recent graduates and young job seekers, improving their access to employment opportunities.

China’s unemployment rate rose slightly to 5.4% in February, up from 5.2% in the previous month. However, youth unemployment surged to 16.9% in February, as the labor market remains under pressure despite government efforts to revive the sluggish economy. Meanwhile, the unemployment rate for individuals aged 25-29 and 30-59 increased to 7.3% and 4.3%, respectively.

China plans to increase its reserves of key industrial metals such as cobalt, copper, nickel, and lithium to strengthen supply resilience amid rising demand for energy transition materials and geopolitical tensions. Bloomberg reported that the National Strategic Reserves Administration has proposed purchasing certain metals, though the government has yet to disclose details regarding the timing and quantity of purchases. Uncertainty in trade has pushed metal prices higher, with copper reaching $10,000 per ton and cobalt prices surging due to an export ban in the Democratic Republic of the Congo. At the same time, China is reportedly expanding storage facilities for essential goods such as grains, oil, and fertilizers to reduce risks from trade disruptions, including those caused by U.S. tariffs.

Techical analysis data (5H)

Resistance: 7.2693, 7.2706, 7.2731

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.263 - 7.2655 but cannot break the support at 7.2655, you may set a TP at approximately 7.2706 and SL at around 7.2617 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.2693 - 7.2706, you may set a TP at approximately 7.2731 and SL at around 7.263 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.2693 - 7.2706 but cannot break the resistance at 7.2693, you may set a TP at approximately 7.263 and SL at around 7.2731 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.263 - 7.2655, you may set a TP at approximately 7.2617 and SL at around 7.2706 or according to your acceptable risk.

Pivot point March 27, 2025 09:40 PM. GMT+7