USD\/CNH extended its pullback after the pair slipped to 6.7653, following a move that saw it rise to 6.7781 before turning lower. Earlier, USD fell to 6.7695 on Wednesday, and analysts had flagged 6.7660 as interim support with the major level still at 6.7600. With downside momentum described as building, the near-term focus is on whether the pair can test 6.7600 while remaining capped below 6.7780, alongside minor resistance at 6.7720.<\/p>\n
Over a one-to-three week horizon, the stated bias remains for further downside towards 6.7600, contingent on resistance holding. A move above 6.7820 would invalidate that view, after the \u201cstrong resistance\u201d reference was previously placed at 6.7860, and an earlier framework suggested that a breach of 6.7800\u2014after minor resistance at 6.7760\u2014would signal the decline was stabilising. The negative stance was dated 15 Jul, with spot cited at 6.7720.<\/p>\n
We see growing downward momentum for the USD\/CNH pair and recommend that derivative traders position for a drop toward 6.7600 over the next one to three weeks. The dollar’s upside remains heavily capped by immediate resistance at 6.7780, with stronger key resistance at 6.7820. As long as these levels hold, the path of least resistance for the currency pair is firmly to the downside.<\/p>\n
This bearish view aligns with recent economic data, such as China\u2019s export growth rising by 8.6% and a widening trade surplus of nearly $99 billion. Historically, strong trade surpluses create natural inflows that boost the yuan against the greenback. We expect these solid fundamentals to keep the US dollar under pressure in the coming days.<\/p>\n
For option traders, we suggest buying short-term put options with a target strike of 6.7600 to capture this downward slide. Futures traders can establish short positions on any minor pullbacks toward 6.7720, keeping a tight stop-loss order placed just above 6.7820. We advise monitoring these levels closely today, as a breach above 6.7820 would signal that the current decline is stabilizing.<\/p>\n\n\n\n