FxWirePro: USD/ CNY gains slightly, but downward resumption looks likely

• USD/ CNY edged higher  on Wednesday as  investors digested Chinese factory activity and awaited fresh catalyst.

• China's factory activity returned to growth in September, as easing weather disruptions allowed factories to resume operations and a global artificial intelligence boom supported the industrial sector.

•Despite the improvement, China’s recovery remains uneven as subdued consumption and investment continue to constrain the outlook.

• The official manufacturing purchasing managers' index (PMI) rose to 50.1 ​from 49.8 in August, ending two straight months of contraction, according to the National Bureau of Statistics

• The Chinese currency has been on an upward trend since late 2023, underpinned by strong exports, foreign exchange settlement flows and broad dollar weakness.

•Technical signals show the pair could lose more ground as RSI is down  , and 9, 11,21 SMA’s are trending south.

•  Immediate resistance is located at 6.707(SAM 20), any close above will push the pair towards 6.718(Higher BB).

• Support is seen at 6.701(Daily low) and break below could take the pair towards 6.693 (23.6%fib).

Recommendation: Good to sell around 7.005 with stop loss of 7.010  and target price of 6.990