FxWirePro: USD/ CNY bearish momentum builds ,eyes 6.900 level

• USD/CNY slipped  lower on Monday  as the dollar weakened after a U.S. Federal Reserve official said there's room to cut interest rates.

•San Francisco Fed President Mary Daly said one or two more rate cuts may be needed to address weakness in the U.S. labor market, a move that could reduce the dollar’s appeal.

•Sentiment was also aided by a stronger guidance rate and data showing China's foreign exchange reserves rose more than expected in January.

•Traders were also encouraged by official data showing China's foreign exchange reserves, the world's largest, rose to $3.399 trillion last month, exceeding the $3.372 trillion forecast

•The yuan had gained for 11 straight weeks in its longest winning streak since early 2013, helped by dollar weakness, China's resilient exports and the growing appeal of China's capital markets.

•  Immediate resistance is located at 6.950(38.2%fib), any close above will push the pair towards 6.954 (SMA 20).

• Support is seen at 6.930(23.6%fib) and break below could take the pair towards 6.921 (Lower BB).

Recommendation: Good to sell around  6.940 with stop loss of 6.960 and target price of 6.900