The USD/CNY currency pair on Friday plunged to a new 30-month low of about 6.4200 following the latest round of US spending data. The currency pair appears to have broken out of a highly volatile sideways channel formation in the 60-min chart.

The pair has now fallen several levels below the 100-hour and the 200-hour SMA lines. Friday’s bearish breakout also pushed the currency pair to the oversold levels of the 14-hour RSI. This could trigger a short-term rebound.

USD/CNY Fundamentals Overview

From a fundamental perspective, the USD/CNY currency pair is trading at the back of a relatively busy period in the US market. In contrast, it has been a relatively quiet period in the Chinese market. On Friday, the US core personal consumption expenditure price index for December beat the expected (MoM) change of 0.1% with a change of 0.3%. The (YoY) personal consumption expenditure price index also outshone 1.3% with 1.5%. On the other hand, personal spending posted a change of -0.2% compared to the expected change of -0.4%. Personal income for the period also came out strong with a change of 0.6% (MoM) versus an expectation of 0.1%.

Earlier in the week, the US preliminary Q4 GDP matched the annualized expectation of 4% but missed the (QoQ) estimate of 2.4% with 1.9%. Durable goods orders for December came in better than expected with a change of 0.9% versus 0.2% while nondefense capital goods orders ex-aircraft matched 0.6%. On the other hand, durable goods orders ex-transportation beat the expectation of 0.5% with a change of 0.7%.

USD/CNY Technical Analysis (the 60-min Chart)

Technically, the USD/CNY currency pair appears to have recently made a bearish breakout from a sideways channel in the 60-min chart. The pair has since dropped to the oversold levels of the 14-hour RSI.

The bulls will be targeting short-term rebound profits at around 6.4363 or higher at 6.4500. On the other hand, the bears will look to extend the current pullback towards 6.4129 or lower at 6.3997.

USD/CNY Technical Analysis (the Daily Chart)

In the daily chart, the USD/CNY currency pair appears to be trading within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment.

The bulls will be targeting long-term reversals at around 6.4916 or higher at 6.5642. On the other hand, the bears will look to retain long-term control by targeting profits at around 6.3548 or lower at 6.2745.