FxWirePro: USD/CNY hits two-week high as dollar strengthens broadly

• USD/CNY  hit two-week high on Tuesday   as yuan was pressured by broad greenback strength in global markets as traders reduced bets on Federal Reserve interest rate cuts.

•   The U.S. dollar hovered near a three-month high against its peers, with a divergence in views from Fed officials clouding the outlook for a rate reduction in December..

•Fed officials continued offering competing views of where the economy stands and the risks facing it in the absence of economic data suspended due to the federal government shutdown.

•Traders are now pricing in a 65% chance of a rate cut in December, compared with 94% a week earlier, CME FedWatch showed.

•Separately, currency traders said they will now turn their focus to upcoming Chinese economic data, after October’s manufacturing figures signaled a slowdown in the broader economy.

•  Immediate resistance is located at 7.123(Daily high), any close above will push the pair towards 7.136 (38.2%fib)

• Support is seen at 7.119(38.2%fib) and break below could take the pair towards 7.097(23.6%fib).

Recommendation: Good to buy around  7.120 with stop loss of 7.100 and target price of 7.135