USD/CNY: Goldman Sachs forecasts yuan strength to 7.00 from 7.35

USD/CNY is expected to decline to 7.00 within 12 months according to Goldman Sachs' revised forecast, representing a significant yuan appreciation from their previous target of 7.35. The investment bank maintains an overweight position on Chinese equities, citing the strong historical correlation between yuan appreciation and Chinese stock performance. Consumer discretionary, property, and brokerage sectors are identified as primary beneficiaries of the strengthening currency. The forecast revision reflects improving Chinese economic fundamentals and potential policy support measures. Current USD/CNY trades near 7.25, suggesting approximately 3.5% potential yuan appreciation from current levels. Technical indicators show strong support forming at 7.20, with resistance at 7.30. The strengthening yuan could attract additional foreign investment flows into Chinese markets, potentially accelerating the currency's appreciation momentum and creating favorable conditions for yuan-denominated assets.