FxWirePro: USD/CNY drifts lower, set to stay on back foot

• USD/CNY dipped towards level  7.200 on Friday as the greenback weakened on concerns over U.S. fiscal challenges.

•Investor caution persisted as markets absorbed the impact of President Trump’s tax cut bill, expected to increase U.S. debt by $3.8 trillion over the next ten years.

• Dollar weakness continued following Moody’s downgrade of U.S. debt ratings last week, shifting investor focus to Washington’s $36 trillion debt burden and President Donald Trump’s tax bill, which could increase it by trillions more.

•Rising U.S. yields and a weaker dollar have driven the yield gap between China’s 30-year government bonds and comparable U.S. bonds to an all-time high.

• At GMT 05:45, the dollar was down  0.04% to 7.200 against the Chinese Yuan.

•  Immediate resistance is located at 7.221(38.2%fib), any close above will push the pair towards 7.229(May 12th high)

• Support is seen at 7.198(23.6%fib) and break below could take the pair towards 7.186 (May 14th low).

Recommendation: Good to sell around 7.205 with stop loss of 7.240 and target price of 7.170