USD/CNY recovers from 6-month low ahead of US non-farm payrolls data

USD/CNY has recovered from the 6-month low of 6.7834 ahead of the US non-farm payrolls data, which is expected to show the economy added 185K jobs in May.

The average hourly earnings are seen rising 0.2% in May, compared to 0.3% rise seen in April.

The USD/CNY currently trades 6.8181; up 0.10% on the day. The People’s Bank of China (PBOC) fixed the midpoint for the currency at 6.807.

The recovery from the 6-month low could gather pace if the US wage growth number betters estimates. Traders need to keep an eye on the long duration treasury yields (10-year yield), given the US dollar no longer takes heart from the strength in the short duration yields.

USD/CNY Technical Levels

A break above 6.8293 (Jan 18 low) would expose 6.8338 (Jan 23 low). On the lower side, breach of support at 6.8017 (session low) would open up downside towards 6.7834 (previous day’s low).

The daily RSI is oversold. This goes well with the potential for a sharp recovery from the six-month low on the back of a strong US data.