Chinese growth slows, Citigroup reports earnings
USD/CNH => The pair trades at a monthly high
BTC/USD => The bitcoin rises to 20.5k
Citigroup => The stock falls 5% this week
USD/CNH rises after Chinese GDP
USD/CNH rose 0.3% in the previous session as the USD surged across the board following the hotter-than-expected consumer prices and producer price data. The dater showed that inflation was still rising in the US and could climb higher in the coming months as higher wholesale prices feed through the system. The data fuelled aggressive Fed bets, with the market expecting a 1% rate hike in July and 0.75% in September. Overnight Chinese GDP data came in worse than expected after the harsh COVID lockdown restrictions. Looking ahead, US retail sales and Michigan consumer confidence data are due. Surging prices have already knocked confidence to the lowest level on record; will sales slow too?
| US PPI YoY June
China GDP QoQ Q2 |
Actual: 11.2% (0.3%)
Actual: -2.6% (3.9%) |
Previous: 10.9%
Previous: 1.3% |
Where next for USD/CNH?
USD/CNH has been forming a series of higher lows and trades above its 20 & 50 sma. However, the price has run into resistance three times at 6.79. The RSI is supportive of further gains, but buyers will need to break above 6.79 in order to continue the bullish trend. Meanwhile, support can be seen at the 50 sma at 6.71. Meanwhile would take a move below 6.68 to create a lower low and bring 6.64 into target.
Bitcoin set for weekly losses
Bitcoin rose in the previous session, despite stocks falling lower. BTCUSD has risen 5% over the past 48 hours, although it is still set to lose 4.5% across the week. The price has pushed back over 20k, in what appears to be a sell the rumor buy the fact move surrounding the US inflation release. The price continue to consolidate around the 20k level, which is acting as a bit of a magnate. In the 22k region, there is a fair amount of resistance with the 50 sma. Given fundamentals of the strong USD and hawkish Fed, the rallies could be sold into, opening the door to 18k, which offers some support, with 12k a potential longer term downside target.
Citigroup Q2 earnings preview
Citigroup is due to report Q2 earnings before the market opens; the report comes as the share price trades down some 25% year to date amid concerns that an economic slowdown could see a drop off in business and mortgage lending. The bank has also reduced its exposure to Russia to $7.8 billion. While earnings are expected to have declined YoY, revenues are likely to have increased. The Street forecasts EPS falling to $1.67, but revenue is set to grow to $18.34 billion compared to last year’s EPS of $2.85 and revenue of $17.47 billion.
Support can be found at 43.44 (2022 low) and 41.95 (November low).
Resistance for the pair can be seen at 47.00 (50 sma) and 48.90 (50 sma).
