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USD/CNY has resumed its down move as the pair broke below the July low at 6.9651. Analysts at Credit Suisse remain biased lower within the broad range, with the 38.2% retracement of the 2018/2019 upmove at 6.8625/8242 expected to cap the downtrend.

Key quotes

“USD/CNY has resumed its downmove, breaking below the 61.8% retracement of Q1 surge and July low at 6.9694/51, in line with its in-range ‘head & shoulders’ top, which is still in place. The ‘measured objective’ to this top suggests we should see a move to the 2020 and July 2019 low as well as the 38.2% retracement of the 2018/2019 upmove at 6.8625/8242, where we expect the market to hold and shift into a broad range.”

“It is worth noting that a break below the 38.2% retracement of the 2018/2019 upmove at 6.8625/8242 at any stage would complete a much larger and more important ‘double top’.” 

“We ideally look to hold below 7.0279 to maintain the downside pressure.”