FxWirePro: USD/CNY edges higher but outlook is strongly bearish

• USD/CNY edged  higher on  Friday as China's yuan weakened slightly   as the central bank guided the currency lower despite broad weakness in the greenback.

• Prior to the market opening, the People's Bank of China set the midpoint rate CNY=PBOC at 6.7841 per dollar. The fixing pulled back from Friday's strongest level in more than three years and was 593 pips weaker .

• The central bank has been gradually strengthening its daily yuan official guidance, but at levels weaker than market expectations, suggesting it wants to manage the pace of appreciation, traders and analysts said..

• The spot yuan is allowed to trade a maximum of 2% on either side of the fixed midpoint each day. The yuan is up 0.9% against the dollar this month, and 4.0% firmer this year..

•  Immediate resistance is located at 6.776(38.2%fib), any close above will push the pair towards 6.782(SMA 20)

• Support is seen at 6.719(23.6%fib) and break below could take the pair towards 6.712 (Lower BB).

Recommendation: Good to sell around 6.730, with stop loss of 6.760 and target price of 6.700