USD/CNH faces pressure as Trump-Xi meeting approaches with trade optimism

USD/CNH sentiment has shifted cautiously bearish ahead of tomorrow's crucial Trump-Xi meeting scheduled for 3-4 hours starting between 0000-0300 GMT Thursday. Markets are positioning for potential yuan strength on rising optimism that the leaders will make progress on trade negotiations. Trump's comment that 'things will work out very well' has fueled risk-on sentiment, weighing on the safe-haven dollar. Additionally, the announcement that a trade deal with South Korea is 'pretty much finalized' reinforces the administration's willingness to reach agreements, potentially setting a positive tone for China talks. Traders should monitor Asian session volatility as the meeting approaches, with USD/CNH likely to see increased two-way price action. A breakthrough in negotiations could trigger significant yuan appreciation, while any disappointment might see the pair spike higher on renewed trade uncertainty.