China still requires continued economic stimulus.

The yuan has appreciated, reaching 7.24 yuan per U.S. dollar, supported by a weakening dollar amid rising concerns over President Donald Trump’s large-scale tariff measures, which could push the global economy—especially that of the U.S.—into recession. On Wednesday, Trump announced a 10% tariff on basic imported goods, while other key items may face even higher tariffs. In retaliation for China’s threat to raise tariffs on U.S. imports, the U.S. imposed tariffs of 54% on China and 20% on the European Union.

Nevertheless, China announced that it would resume negotiations with the European Union, particularly in the electric vehicle (EV) sector, a major Chinese export. The Chinese Ministry of Commerce stated that talks would begin soon to improve cooperation between Chinese and European companies. This comes after Trump imposed a 25% global import tariff on automobiles, escalating trade tensions. Last year, the European Union raised import tariffs on EVs manufactured in China to 17% for BYD, 18.8% for Geely, and 35.3% for SAIC.

Fitch Ratings downgraded China’s long-term credit rating from A+ to A on April 3—the first downgrade in 18 years. Fitch cited the downgrade as a reflection of the expectation that China’s fiscal situation will continue to weaken, with public debt projected to rise rapidly during the country's economic transition. Public debt-to-GDP is expected to increase significantly over the next few years due to large fiscal deficits, impacting GDP growth. China continues to face weak domestic demand and deflationary pressures.

China’s manufacturing PMI rose to 51.2 in March from 50.8 in February, driven by accelerated output growth and steadily increasing new orders amid improving demand conditions. Additionally, export sales reached an 11-month high, prompting firms to ramp up purchasing activity to meet rising production needs. Employment also increased for the first time since 2023, though only slightly. Meanwhile, input costs fell for the first time in six months due to lower raw material prices.

In the services sector, the PMI rose to 51.9 in March from 51.4 in the previous month, marking the strongest growth in months. New orders grew at the fastest pace in three months, driven by rising domestic demand supported by government measures. While employment declined slightly, the rate of job cuts was the slowest in nearly a year. Production costs in the sector rose only marginally.

Techical analysis data (5H)

Resistance: 7.2829, 7.2881, 7.2919

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 7.2701 - 7.2739 but cannot break the support at 7.2739, you may set a TP at approximately 7.2881 and SL at around 7.2649 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 7.2829 - 7.2881, you may set a TP at approximately 7.2919 and SL at around 7.2701 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 7.2829 - 7.2881 but cannot break the resistance at 7.2829, you may set a TP at approximately 7.2701 and SL at around 7.2919 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 7.2701 - 7.2739, you may set a TP at approximately 7.2649 and SL at around 7.2881 or according to your acceptable risk.

Pivot point April 4, 2025 11:00 PM. GMT+7