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

• USD/CNY edged lower on Tuesday as investors shrugged off weak China PMI data and awaited updates on Sino-U.S. relations.

• China’s factory activity contracted in May for the first time in eight months, signaling that U.S. tariffs are beginning to impact the manufacturing giant directly.

• The Caixin/S&P Global manufacturing PMI dropped to 48.3 in May from 50.4 in April, missing expectations and marking the first contraction since September last year, as well as the lowest reading in 32 months.

• U.S. President Trump and China’s Xi are expected to speak this week, the White House said Monday, with markets watching closely after Trump accused China of breaching a tariff rollback deal.

• At GMT 05:34, the dollar was down 0.02% to 7.196 against the Chinese Yuan.

•  Immediate resistance is located at 7.210(38.2%fib), any close above will push the pair towards 7.224(May 20th high)

• Support is seen at 7.2183(38.2%fib) and break below could take the pair towards 7.169 (Lower BB).

Recommendation: Good to sell around 7.200, with stop loss of 7.230 and target price of 7.150