USD/CNY: Downside pressure while below 6.9738 – Credit Suisse

USD/CNY continues its downmove, trading just above the 6.90 mark, and analysts at Credit Suisse remain biased lower within the broad range. They expect a dip towards 6.8406/8242.

Key quotes

“USD/CNY has continued its downmove since breaking below the 61.8% retracement of Q1 surge and July low at 6.9694/5 and in line with its inrange ‘head & shoulders’ top. 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 6.8406/8242, where we expect the market to hold and shift into a broad range.”

“It is worth noting that a break below 6.8406/8242 at any stage would complete a much larger and more important ‘double top’.”

“We now look to hold below 6.9738 to maintain the downside pressure.”