USD/CNY: 7.05 is likely to be an important support – SocGen

Economists at Société Générale analyze USD/CNY technical outlook.

Pullback should remain contained

USD/CNY evolved within a relentless up-move after breakout from a multi-month consolidation. It has recently faced interim resistance near 7.27 as it touched the upper part of a steep ascending channel. An initial pullback is underway; lower limit of the channel at 7.05 should be an important support near term. 

If the pair overcomes the hurdle at 7.27, the uptrend is expected to extend. Next potential objectives could be at last year's high of 7.32 and projections of 7.40.