• USD/CNY strengthened on Monday as China's yuan weakened following data that showed China's January manufacturing activity unexpectedly contracted.
• China's manufacturing activity unexpectedly contracted in January, its weakest since August, sparking calls for stimulus.
• The official PMI fell to 49.1 in January from 50.1 in December, below the 50-mark that separates growth from contraction.
•Chinese financial markets will be closed for the week-long Lunar New Year holiday from Jan. 28.
• Immediate resistance is located at 7.267 (50%fib), any close above will push the pair towards 7.297 (38.2%fib).
• Support is seen at 7.235(61.8%fib) and break below could take the pair towards 7.206 (Nov 13th low).
Recommendation: Good to buy around 7.250 with stop loss of 7.170 and target price of 7.300
