FxWirePro: USD/ CNY outlook weaker on renewed downside pressure

• USD/CNY slipped  lower on Wednesday  as Yuan strengthened  on POBC’s bank's firmer daily guidance  .

•Prior to the market opening, the People's Bank of China set the midpoint rate   at 6.9438 per dollar, its strongest since May 11, 2023.

• The central bank has continued its practice since November of lifting its official guidance, but to a level weaker than market projections, in what participants interpreted as an attempt to allow steady and measured appreciation in the yuan.

•The yuan had surged to its strongest in nearly three years against the dollar on Tuesday, underpinned by heavy corporate demand for the local currency ahead of China's biggest holiday.

•On the data front, China’s consumer inflation eased in January, with the National Bureau of Statistics reporting a 0.2% year-on-year rise in the CPI.

•  Immediate resistance is located at 6.920(Feb 10th high), any close above will push the pair towards 6.947 (SMA 20).

• Support is seen at 6.909(23.6%fib) and break below could take the pair towards 6.900 (Psychological level).

Recommendation: Good to sell around  6.910 with stop loss of 6.930 and target price of 6.900