- The Chinese Yuan is reporting moderate losses despite the firmer PBOC fix.
- USD/CNY holds below Friday’s high of 6.6390.
The sell-off in the Chinese Yuan has stalled likely due to a firmer daily fix by the People’s Bank of China (PBOC).
The Chinese central bank set the Yuan reference rate at 6.6157 on Monday (vs Friday’s fix of 6.616), snapping eight straight days of the lower fix. That seems to have put brakes on the USD/CNY rally.
Currently, the currency pair is trading at 6.6330 – up 0.24 percent on the day, but well below the high of 6.6390 seen on Friday.
Overbought USD/CNY
The 14-day relative strength index is printing levels well above 70.00, indicating overbought conditions. Consequently, a healthy pullback could be on the cards.
That said, the dip will likely be short-lived as China will likely continue devaluing Yuan to soften the blow of Trump’s trade war.
USD/CNY Technical Levels
Resistance: 6.6390 (Friday’s high), 6.6616 (Oct. 27 high), 6.6820 (September 29 high).
Support: 6.6263 (session high), 6.6046 (previous day’s low), 6.60 (psychological support).
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