The USD/CNY currency pair on Friday pulled back off the current weekly highs of about 6.5500 to trade at around 6.5260 after the latest round of Chinese PMIs.  The currency pair continues to trade within a sideways channel formation in the 60-min chart.

The pair has now dropped below the 100-hour and the 200-hour SMA lines. It also appears to be moving closer to 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 both markets. As the western economy celebrates the New Year, the Chinese calendar is still in November. China will not be celebrating the new year until Feb. 12, when the year of the Ox starts. But that’s not to say that western New Year’s day won’t be observed in the country. As such, it has been pretty much business as usual in the Asian economy. On Thursday, China’s NBS non-manufacturing PMI for December beat the expectation of 52.4 with 55.7. On the other hand, the NBS manufacturing PMI for the period missed the expectation of 52 with 51.9.

In the US, the initial jobless claims for the week ending Dec. 25 beat the expected count of 833k with a tally of 787k claims. On the other hand, the continuing claims for the week ending Dec. 18 outperformed the expectation of 5.39M claims with a claim count of 5.219M. The Chicago purchasing managers’ index for December beat the expectation of 57 with 59.5 while pending home sales for November missed the (MoM) expectation of 0.0% with a change of -2.6%. Earlier in the week, the S&P/Case-Shiller Home Price Indices for October beat 6.9% with 7.9% (YoY).

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

Technically, the USD/CNY currency pair still appears to be trading within a sideways channel formation in the 60-min chart. This indicates a lack of clear directional bias in the market sentiment. 

The bulls will be looking to pounce on short-term profits at around 6.5352 or higher at 6.5454. On the other hand, the bears will target profits at around 6.5172 or lower at 6.5070.

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 long-term bearish bias in the market sentiment. 

The bears will be looking to extend the current declines towards 6.4589 or lower to 6.3970. On the other hand, the bulls will target profits at around 6.5764 or higher at 6.6380.