• USD/ CNY remained close to a three-week low on Monday as the pair continued to weaken on widespread weakness in the greenback following Fed’s Jerome Powell’s dovish stance.
• On Friday, Fed Chair Powell backed imminent interest rate cuts, citing that further job market cooling would be unwelcome and expressing confidence that inflation is approaching the 2% target.
• Figures on U.S. personal consumption and core inflation are expected on Friday, with analysts generally anticipating that the data will be mild enough to support rate cuts in September
• Technical signals are bearish as RSI is at 29, daily momentum studies 5, 9 and 10 DMAs are trending down.
• Immediate resistance is located at 7.1254 (Daily high), any close above will push the pair towards 7.1361 (50%fib).
• Support is seen at 7.1132 (23.6%fib) and break below could take the pair towards 7.1100 (Psychological level).
Recommendation: Good to sell around 7.1300 with stop loss of 7.1600 and target price of 7.1000
