FxWirePro: USD/CNY edges down as yuan gains on strong midpoint fix

• USD/ CNY edged lower on Monday as China's yuan firmed as a much stronger midpoint guidance rate cushioned the impact of renewed trade tensions between Beijing and Washington.

• Trump on Friday unveiled sweeping measures against China, including 100% tariffs on U.S.-bound Chinese goods and export controls on vital software, in retaliation for Beijing limiting rare earth exports.

• Beijing on Sunday called Trump’s latest tariffs on Chinese goods hypocritical, but emphasized that its export controls do not constitute a ban and refrained from imposing new duties on U.S. products.

•The People’s Bank of China (PBOC) set the yuan’s midpoint at 7.1007 per dollar, its strongest level since November 6, 2024. The spot yuan is permitted to fluctuate up to 2% above or below this midpoint each day.

•On the data front,  China’s exports climbed 8.3% year-on-year in September, customs data showed on Monday, surpassing the 6% forecast and marking the fastest growth since March, compared with a 4.4% rise in August.

•  Immediate resistance is located at 7.141(38.2%fib), any close above will push the pair towards 7.145(Higher BB).

• Support is seen at 7.121(SMA 20) and break below could take the pair towards 7.102(23.6%fib).

Recommendation: Good to sell around 7.135 with stop loss of 7.145  and target price of 7.115