USD/CNH clings to 50-DMA as all eyes on Trump-Xi trade talks

• Recently positive China data, contrast to the US economics, favor USD/CNH to remain above 50-DMA.
• Traders await details of the US-China trade talks for fresh direction.

With the contrasting headlines from media concerning the G20 challenging trader sentiment, the USD/CNH pair remains modestly flat around 6.8757 during early Friday.

Recent weakness of the US data, including Pending Home Sales and Initial Jobless Claims, can be compared with higher than expected China’s Industrial Profits to take the clue of the quote’s strength beyond short-term key day moving average (DMA).

However, global media flashes mixed signs for the outcome of the Saturday night meeting between the US President Donald Trump and his Chinese counterpart Xi Jinping.

White House Economic Advisor Larry Kudlow’s comments that the US doesn’t have any preconditions to trade talk brighten the chances of a successful trade negotiation between the world’s two biggest economies.

Weighing on the sentiment could be the Wall Street Journal’s news report that China is planning to ask the US favor for Huawei during the talk. Also, fears of a talk failure inviting heavy tariffs on the Chinese goods from the US, as previously threatened by the President Trump, provides additional burden to the optimists.

It should additionally be noted that the US Michigan Consumer Sentiment and the Chicago Purchasing Managers’ Index, together with the Personal Spending, might offer intermediate moves ahead of the key G20 announcement.

Technical Analysis

A 21-day exponential moving average (21-day EMA) at 6.8944 offers immediate resistance to the pair ahead of highlighting 6.9160 the month’s high around 6.9626.

On the flip side, 50-day simple moving average (50-DMA) level of 6.8690 and month’s bottom surrounding 6.8367 can question sellers targeting late-January high near 6.8190.