• USD/ CNY hovered near 3-1/2-year low on Monday an escalating Middle East conflict kept investors cautious
• The yuan's appreciation is also being tamed by China's widening yield gap with the US, while jitters over Europe's debt problems bolster the safe-haven greenback.
Prior to market open, China's central bank set the yuan's midpoint CNY=PBOC at 6.7313 per dollar, the firmest since February 2, 2023.
The Chinese currency has gained about 4% against the dollar this year, and has advanced roughly 9% since late 2024 in a seven-quarter rising stream
• Immediate resistance is located at 6.704 (38.2%fib), any close above will push the pair towards 6.715 (50%fib)
• Support is seen at 6.691(23.6%fib) and break below could take the pair towards 6.687 (Lower BB).
Recommendation: Good to sell around 6.700 with stop loss of 6.740 and target price of 6.690
