USD/CNH: Bid above 6.94 ahead of key China data

• USD/CNH tests trendline resistance ahead of China data. 
• China’s trade surplus and money supply figures are due at 02:00 GMT. 
• A below-forecast China exports figure could hurt risk assets. 

The USD/CNH is flashing green with above-6.94 print ahead of the release of China’s trade and money supply figures. 

The currency pair tested the resistance at 6.9462 – the trendline connecting May 20 and May 31 highs – earlier today and is currently trading at 6.9424. 

A daily close above the trendline hurdle would mark an upside break of the three-week long consolidation above 6.90 and shift risk in favor of a rise to 7.00. 

The bullish close may happen today if the key China data disappoints expectations. 

The data due at 02:00 GMT is expected to show that China’s exports growth in Yuan terms spiked to 15.5% in May from 3.1% in April. Meanwhile, imports growth is forecasted to jump to 15.9% from 10.3%. The trade surplus is expected to widen to CNY 140.505 billion in May from 93.570 billion in April. 

Further, M2 Money Supply is expected to have risen by 8.6% year-on-year in May. 

Yuan will likely take a hit and so would the risk assets if China’s exports drop, indicating weakening global demand conditions. The risk-off could be severe if China reports a bigger surplus with the US. 

Pivot levels