FxWirePro: Chinese yuan depreciates sharply as trade balance data misses expectations

• USD/CNY is currently trading around 6.3400 marks.
   
• It made intraday high at 6.3400 and low at 6.2648 levels.
   
• Intraday bias remains bullish till the time pair holds key support at 6.2648 mark.
   
• A sustained close above 6.2648 marks will test key resistances at 6.3188, 6.3305, 6.3436, 6.3649, 6.3855 and 6.4017 marks respectively.
   
• Alternatively, a daily close below 6.2648 will drag the parity down towards key supports at 6.2584, 6.2322, 6.2196 and 6.1907 marks respectively.
   
• PBOC sets yuan mid-point at 6.2822 / dlr vs last close 6.2830.
   
• Important to note here that 20D, 30D and 55D EMA heads down and confirms the bearish trend in a daily chart. Current upside movement is short term trend correction only.
   
• China Jan exports y/y increase to 11.1 % (forecast 9.6 %) vs previous 10.9 %.
   
• China Jan imports y/y increase to 36.9 % (forecast 9.8 %) vs previous 4.5 %.
   
• China Jan trade balance decrease to 20.34 bln USD (forecast 54.1 bln USD) vs prev 54.69 bln USD.

We prefer to take long position on USD/CNY around 6.3200, stop loss at 6.2648 and target of 6.3649/6.3855.

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