FxWirePro: USD/CNY hovers near two week low ,scope for further downside

• USD/ CNY hovered near two week low  on Thursday   after PBOC set its strongest daily midpoint in a year, while investors weighed the impact of renewed Sino-U.S. trade action..

• Before the market opened, the PBOC set the yuan midpoint at 7.0968 per USD, its strongest since October 15 and 218 pips above estimates.

•Investors are tracking changes in China’s midpoint rate for indications of tolerance toward yuan gains amid U.S. trade tensions. The yuan has climbed 2.5% year-to-date.

• U.S. officials criticized China’s expansion of rare earth export controls on Wednesday, calling it a threat to global supply chains, while noting China could still alter its approach to sidestep U.S. decoupling efforts.

•China defends export curbs, labeling U.S. criticism hypocritical due to its own trade measures.

•  Immediate resistance is located at 7.142(Oct 14th high), any close above will push the pair towards 7.147(38.2%fib).).

• Support is seen at 7.123(SMA 20) and break below could take the pair towards 7.104(Lower BB).

Recommendation: Good to sell around 7.130 with stop loss of 7.145  and target price of 7.115