Chinese yuan strengthens despite lower than expected Caixin services PMI data

USD/CNY is currently trading around 6.9315 marks.

• It made intraday high at 6.9611 and low at 6.9288 levels.
• Intraday bias remains bearish till the time pair holds key resistance at 6.9650 mark.
• A sustained close above 6.9580 marks will test key resistances at 6.98, 6.9920, 7.0120, 7.0388, 7.0552, 7.07 and 7.0920 marks respectively.
• Alternatively, a daily close below 6.9578 will drag the parity down towards key supports at 6.9210, 6.90, 6.8658, 6.84 and 6.8222 marks respectively.
• Important to note here that 20D, 30D and 55D EMA heads up and confirms the bullish trend in a daily chart. Current downside movement is short term trend correction only.
• China’s Caixin services PMI stands at 26.5 vs 51.8 previous release (expected 48.0).

We, at FxWirePro, prefer to take short position on USD/CNY around 6.94, stop loss at 6.97 and target of 6.9210/6.90.