News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
Wall Street
More View more
Real Time News
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here:
  • 🇬🇧 Retail Sales YoY (MAY) Actual: 24.6% Expected: 29% Previous: 42.4%
  • 🇬🇧 Retail Sales ex Fuel YoY (MAY) Actual: 21.7% Expected: 27.3% Previous: 37.7%
  • Heads Up:🇬🇧 Retail Sales ex Fuel YoY (MAY) due at 06:00 GMT (15min) Expected: 27.3% Previous: 37.7%
  • Heads Up:🇬🇧 Retail Sales YoY (MAY) due at 06:00 GMT (15min) Expected: 29% Previous: 42.4%
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here:
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Gold are long at 84.50%, while traders in France 40 are at opposite extremes with 79.56%. See the summary chart below and full details and charts on DailyFX:
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here:
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.09% 🇨🇭CHF: 0.06% 🇯🇵JPY: 0.03% 🇬🇧GBP: -0.01% 🇦🇺AUD: -0.01% 🇳🇿NZD: -0.06% View the performance of all markets via
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: France 40: 0.14% US 500: 0.07% Wall Street: 0.04% Germany 30: -0.04% FTSE 100: -0.11% View the performance of all markets via
Yuan Currency Volatility: USDCNH Eyes Trade War & Looming Data

Yuan Currency Volatility: USDCNH Eyes Trade War & Looming Data

Rich Dvorak, Analyst


  • Elevated USDCNH implied volatility readings persist as forex option traders still anticipate heightened price action in the Chinese Yuan
  • CNY could move significantly in response to trade talk headlines and Wednesday’s expected data dump from China
  • Find out why you should Watch CNY, HKD & SHCOMP for Clues on US China Trade War

Spot USDCNH prices notched a parabolic ascent since markets caught wind that trade tensions between the US and China were escalating. The shocking deterioration in negotiations stunned market participants and sent traders fleeing from risk and into safe-havens. Likewise, the jolt of uncertainty caused currency market volatility to surge and was notably reflected in USDCNH implied volatility measures.


CNY Chinese Yuan and Implied Currency Volatility Chart

Following President Trump’s tweets on May 3 which stated that the US will increase tariffs on Chinese exports, USDCNH overnight implied volatility skyrocketed from 2.91 percent to 6.51 percent and exploded further to 10.95 percent by May 9 as market risk and uncertainty took footing.

Similar spikes in USDCNH implied volatility have historically seen sizable swings in spot prices follow – generally with fundamental factors such as the US China trade war serving as catalysts for big market moves. Although USDCNH implied volatility has receded slightly from the knee-jerk high printed last week, the price action metric across various tenors remains elevated and could suggest that the US Dollar may continue climbing against the Chinese Yuan.


USDCNH Price Chart Implied Currency Volatility

Nevertheless, the next direction of spot USDCNH may be dictated by upcoming Chinese economic data such as industrial production, retail sales, property investment and the jobless rate which are all expected to be released Wednesday at 2:00 GMT.

If tomorrow’s data out of China is reported roughly in line with expectations and does provide any new cause for concern, markets might possibly witness spot USDCNH continue its advance still. This could occur if traders interpret the data with the perspective that the Chinese economy may not have a sense of urgency to land a deal with the US. On the other hand, disappointing data could place added pressure on China to reach a trade agreement which has potential to stymie further gains in USDCNH.

That being said, spot USDCNH is estimated to gyrate between 6.8548 and 6.9566 with a 68 percent statistical probability over the next 5 trading days judging by USDCNH 1-week implied volatility of 6.30 percent. The currency pair currently trades near the 6.9040 mark which is slightly below technical resistance posed by the 76.4 percent Fibonacci retracement level drawn from the respective high and low recorded on October 31, 2018 and March 20, 2019.

As USDCNH approaches the upper or lower bound of the 1-standard deviation band around spot prices, traders might be able to gauge the respective decreasing or increasing likelihood that a US China trade deal will be reached in the near future. Read more about USDCNH and Why 7.00 is the Spot to Watch in the US China Trade War.

- Written by Rich Dvorak, Junior Analyst for DailyFX

- Follow @RichDvorakFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.