FxWirePro: USD/CNY downside pressure builds, key support level In focus

• USD/CNY  edged lower on Monday  as yuan firmed modestly tracking optimism over a potential resolution to the U.S. government shutdown after the Senate advanced a funding deal, while investors awaited upcoming Chinese data for signs of domestic economic resilience..  

•  A U.S. Senate move on Sunday offered some relief to markets, signaling progress toward ending the 40-day government shutdown that has grounded federal operations and disrupted food aid and air travel.

• On the economic front, recent Chinese data showed an unexpected drop in exports alongside a surprise rise in consumer inflation driven by strong holiday demand, leaving investors uncertain about the likelihood of further monetary stimulus this year.

• China is due to release credit data this week and other indicators of economic activity such as retail sales on Friday, and currency traders expect these figures to shed more light on the economy..

•  Immediate resistance is located at 7.130 (38.2%fib), any close above will push the pair towards 7.147(Higher BB)

• Support is seen at 7.097(23.6%fib) and break below could take the pair towards 7.092(Lower  BB).

Recommendation: Good to sell around  7.120 with stop loss of 7.140 and target price of 7.095