Below is an extract from Eamonn’s handy posts regarding the midpoint setting, and here is some further explanation of what it is and how it works.
The People's Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.
- USD/CNY is the onshore yuan. Its permitted to trade plus or minus 2% from this daily reference rate.
- CNH is the offshore yuan. USD /CNH has no restrictions on its trading range.
- A significantly stronger or weaker rate than expected is typically considered a signal from the PBOC.
The previous close was 7.2629
The USDCNY is approaching the previous max pain level around 7.37 where the PBoC intervened in 2023 so worth keeping that level marked up.
USDCNY not too far from previous max pain level for the PBoC