• USD/CNY hit a three-year low on Tuesday as the yuan strengthened, supported by strong forex inflows following China’s record current account surplus in the fourth quarter..
• Monthly net forex inflows via Chinese banks totaled $79.9 billion in January, the third largest in history, according to official forex settlement data. It followed record inflows in December.
• Meanwhile, preliminary data shows China's current account surplus hit a record high in the fourth quarter, thanks to strong exports as shippers diversified into non-U.S. markets..
• The yuan firmed roughly 0.1% to 6.894 per dollar in early trading, having hit the strongest level since May 2023.
• Immediate resistance is located at 6.908 (Daily high), any close above will push the pair towards 6.922(SMA 20).
• Support is seen at 6.839(23.6%fib) and break below could take the pair towards 6.885 (Lower BB).
Recommendation: Good to sell around 6.895 with stop loss of 6.920 and target price of 6.860
