FxWirePro: USD/ CNY neutral in the near-term, scope for downward resumption

• USD/ CNY edged higher on Tuesday after PBOC guided the currency weaker through its daily guidance fix, a move that traders saw as a signal to temper the currency's recent gains.

•Prior to the market opening, the People's Bank of China (PBOC) set the midpoint CNY=PBOC at 6.9858 per dollar, 15 pips weaker than the previous setting, snapping two consecutive days of strengthening..

• The central bank has been carefully managing the pace of yuan's appreciation, consistently setting the midpoint weaker than market projections since November

• Exporters typically increase foreign exchange settlements at this time of year to meet payment needs, including employee bonuses ahead of the Lunar New Year holiday in mid-February.

•  Immediate resistance is located at 6.976 (SMA 20), any close above will push the pair towards 6.993(38.2%fib).

• Support is seen at 6.952(23.6%fib) and break below could take the pair towards 6.941 (Lower BB).

Recommendation: Good to buy  around 6.950 with stop loss of 6.970  and target price of 6.940