In September, the Chinese reduced their commitment to US government debt by almost $ 14 billion, the strongest since January. In the hands of the largest foreign creditor of the United States, there were securities valued at USD 1.15 trillion.
The Chinese sold off US government debt for the fourth consecutive month and their ownership at the end of September fell to the lowest level in more than a year - according to the US Treasury Department. Nevertheless, China remains in the dollar trap - in order to maintain control over the USD / CNY exchange rate, it must maintain a high commitment to US bonds - accumulating more in the market pressure to strengthen the yuan and sell them out if it wants to stop the renminbi's weakening. Currently, Beijing has been trying to slow down the yuan's weakening against the dollar for several months, also buying "red" on the market for the previously collected "green". September reduction by USD 13.7 billion almost coincides with the size of the September interventions of the People's Bank of China on the currency market, estimated based on the change in the value of Chinese foreign exchange reserves. It is worth remembering, however, that the Treasury Department reports the amount of involvement in US bonds of both central banks and private investors.
Let's now take a look at the USD/CNY technical picture at the H4 time frame. The market has made a local high at the level of 6.973, but then the price reversed and hit the level of 6.86, which is now a technical support. Currently, the price is trading inside of the corrective horizontal zone between the levels of 6.92 - 6.96 in a neutral market conditions. Moreover, the price is still trading inside of the upwards sloped channel, so higher prices are still expected.
