• USD/CNY hovered near a 3-1/2-year low on Friday, heading for a seventh consecutive weekly decline, as yuan firmed on stronger yuan fixing and fading expectations of a September Federal Reserve rate hike.
• Prior to the market opening, the People's Bank of China set the midpoint rate CNY=PBOC at 6.7878 per dollar, its strongest since February 8, 2023.
• China’s central bank injected 349 billion yuan via overnight reverse repos on Friday, skipping seven-day operations for a fourth straight day to manage funding costs..
• External factors also supported the yuan as unchanged U.S. producer prices in July reinforced expectations that the Fed may hold rates steady next month.
• Immediate resistance is located at 6.755(SMA 20), any close above will push the pair towards 6.782(Higher BB)
• Support is seen at 6.741(23.6%fib) and break below could take the pair towards 6.731 (Lower BB).
Recommendation: Good to sell around 6.750, with stop loss of 6.780 and target price of 6.720
