USD/CNY briefly challenged the peak of 2019 at 7.19. Since then, the pair has reversed back lower and could extend its decline on a dip under 7.02, economists at Société Générale report.

Initial resistance aligns at 7.17/19

“USD/CNY has faced stiff resistance near the upper limit of a multiyear channel near 7.26 forming a weekly shooting star. This is not a reversal pattern but denotes temporary exhaustion.” 

“An initial pullback is taking shape; 7.02, the 23.6% retracement from 23.6% is first support. In case this breaks, there would be a risk of a deeper down move.”

“7.17/7.19 is immediate resistance zone.”