USD/CNH hovers above 6.3600 on China’s mixed covid updates, focus on Xi-Biden call over Ukraine

• USD/CNH dribbles after bouncing off one-week low, indecisive on weekly as well.
• China witnesses increase in covid numbers after the previous declines, allows factory production in Shenzen.
• Mixed concerns over Ukraine-Russia talks join markets anxiety ahead of Xi-Biden call, light calendar to restrict immediate moves.

USD/CNH remains directionless around 6.3650 amid Friday’s sluggish Asian session.

In doing so, the offshore Chinese yuan (CNH) pair struggles to justify covid-linked optimism at home as indecision for the Ukraine-Russia crisis intensifies ahead of today’s phone call between US President Joe Biden and his Chinese counterpart Xi Jinping.

As per the latest virus updates from China, conveyed by Reuters, “Mainland China reported 2,416 new confirmed coronavirus cases on March 17, the country's national health authority said on Friday, compared with 1,317 a day earlier.” It’s worth noting that the COVID-19 daily infections were easing in the last two days from the record top. On the contrary, reports of factory production restart in five districts of Shenzen keep buyers hopeful.

Elsewhere, China’s Foreign Ministry confirmed that China and Russia met on March 17 to discuss security cooperation. Beijing previously denied the US allegations of readiness to help Moscow in the battle with Ukraine. Hence, the issue will be important and can add to the USD/RUB upside should it produce negative headlines during today’s call between US President Joe Biden and his Chinese counterpart Xi Jinping.

It should be noted that looming fears of Russia’s default and the continuation of the peace talks between Moscow and Kyiv keep traders confused amid a light calendar day.

Looking forward, updates over the Russia-Ukraine stand-off will be the key for near-term directions.

Technical analysis

A daily closing beyond the 100-DMA level surrounding 6.3650 becomes necessary to confirm further upside targeting the late January tops surrounding 6.3865.