FxWirePro: USD/ CNY outlook weaker on renewed downside pressure

• USD/CNY slipped towards the 6.90 level on Thursday as the yuan was supported by strong corporate demand ahead of the Lunar New Year and improved sentiment toward Chinese assets.  

• Companies, especially exporters, typically require yuan before the Lunar New Year holiday to meet obligations such as wages, supplier payments, and bonuses...

• The yuan was also supported by improved sentiment toward onshore equity and bond markets.

• The yuan has gained 1.3% against the dollar so far this year, following a 4.5% rise last year, its strongest annual performance since 2020.

•  Immediate resistance is located at 6.920(Feb 10th high), any close above will push the pair towards 6.945 (SMA 20).

• Support is seen at 6.901(23.6%fib) and break below could take the pair towards 6.895 (Lower BB).

Recommendation: Good to sell around  6.903 with stop loss of 6.910 and target price of 6.890