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  Shanghai Composite down 0.34%, Shenzhen Component loses 0.5% on Monday.
• New bank loans in China drop 89% in July from June, raising economic worries.
• Country Garden misses payments, suspends bond trading; Zhongrong Trust delays payments.
• Property and heavyweight stocks see substantial losses.
• Offshore yuan weakens past 7.25 per dollar, lowest in six weeks.
• People’s Bank of China keeps rates unchanged in July after June cut.
• China’s 10-Year Government Bond Yield hits 51-week low at 2.621%.
• Weak economic data, falling inflation rates, exports, and imports contribute to market unease.
• Despite authorities’ intent to boost economy, lack of concrete plans disappoints markets.
• People’s Bank of China’s cautious approach reflects focus on economic conditions.

The Chinese Yuan has experienced a decrease of approximately 0.3% against the dollar, aligning with the daily interval’s movement toward a balanced extreme. This level might act as a support for the Yuan, potentially bolstered by dollar long liquidations and absorption dynamics. The USD/CNH exchange rate remains skewed toward the upside due to the influence of higher yields on the currency.

In the short-term perspective, absorption patterns around the highs could signify opportunities for Yuan long positions during the New York trading session. However, it’s important to exercise caution given the current fundamental landscape, which lends support to the dollar at this juncture.

While the dollar index shows a slight increase, there are indications of potential absorption, which could lead to a pullback lower and a return to the prior balanced price range. Such a scenario might provide backing for the Yuan. Present calculations suggest a possible bearish undertone for the dollar in the upcoming New York trading session. Meanwhile, the short-term outlook appears to be targeting the swing highs observed during the overnight session once again.

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