The Chinese yuan has completed almost two months in its medium term range with the central bank not showing keen interest in pushing up or down the currency amid mixed economic signals.
The USD/CNY had fallen below the 50% Fibonacci retracement of the January-April rally in mid-August, but the pair has not broken below the 61.8% line, making a range of 6.1560-6.1270 since then.
Consumer price inflation and industrial output data for August released in September were negative surprises but the manufacturing PMI numbers came in October were better than expected.
The market, in the meantime, witnessed a strong US dollar rally aided by expectations that the US Federal Reserve will hike rates sooner than earlier forecast but at the same time, pro-democracy protests in Hong Kong dampened the outlook for the Chinese economy.
Now the market is waiting for the September inflation data from the world's second largest economy, scheduled for 15 October, which could lead to a break of the range.
On the upside, the USD/CNY has its immediate target at 6.1805, the 38.2% Fibonacci level and then 6.1960 ahead of the 23.6% level of 6.2137.
Further north, the pair has resistance at 6.2372 ahead of a retest of the April peak of 6.2673.
In case of a break lower, the pair will aim 6.1128 before 6.0990. The next stop will be 6.0700 ahead of the January low of 6.0407.