FxWirePro: USD/ CNY hits 33-month low, scope for further downside

• USD/CNY fell to a 33-month low Tuesday as Yuan was supported by strong corporate  demand ahead of China’s major festival.

• Exporters and other firms usually need yuan before the Lunar New Year to pay wages, suppliers, and bonuses.

•Banks continued to receive queries from corporate clients about converting dollars to yuan, currency traders said.

•Some currency traders echoed the view and added that the opportunity cost of holding dollars has been on the rise as a strengthening yuan could eclipse the returns from dollar assets.

•The yuan has so far strengthened more than 1% against the dollar this year, after booking a 4.5% gain last year, which was the best annual performance since 2020.

•  Immediate resistance is located at 6.920(Daily low), any close above will push the pair towards 6.939(Daily high).

• Support is seen at 6.910(23.6%fib) and break below could take the pair towards 6.903 (Lower BB).

Recommendation: Good to sell  around 6.930 with stop loss of 6.970  and target price of 6.900