• USD/CNY recovered from 6-month low on Wednesday as market participants turned cautious, awaiting further clarity on U.S.-China trade negotiations.
• The temporary easing in tensions between the two economic giants initially bolstered the yuan, but with no concrete resolution in sight, investors scaled back buying yuan leading to a mild rebound.
•On Tuesday, China's yuan surged to levels not seen since November 2024, breaching the psychologically significant 7.2 per dollar threshold in both onshore and offshore markets.
• This appreciation was driven by de-escalation in U.S.-China trade tensions, following a 90-day tariff truce agreement between the two countries.
• At GMT 05:32, the dollar was up 0.17% to 7.214 against the Chinese Yuan.
• Immediate resistance is located at 7.218(38.2%fib), any close above will push the pair towards 7.246(50%fib)
• Support is seen at 7.201(Daily low) and break below could take the pair towards 7.184 (23.6%fib).
Recommendation: Good to sell around 7.215 with stop loss of 7.250 and target price of 7.180
