USD/CNY to rebound above the 6.50 level amid China's tech crackdown – SocGen

Dip buying by retail investors emerged and ended a five-week losing streak for China tech stocks. A return back below the 6,00 level on the HK Tech index would imply a subsequent move above 6.50 in the USD/CNY pair, economists at Société Générale report.

The 6.4460 mark should cushion downside

“The high inverse correlation between USD/CNY and HK Tech index suggest that a return below 6,000 for the equity index would give USD/CNY a greater chance of settling above 6.50, barring PBoC intervention.”

“USD/CNY crossed above the daily Ichimoku cloud recently and is now defending it. This denotes a short-term bounce is likely towards July high at 6.5300.” “Graphical levels of 6.4460 should cushion downside.”