USD/CNH: Mild rebound from lows – OCBC
|USD/CNH rebounded this morning after USD/CNY daily fix was set higher (at 7.1072 vs. 7.1030 last Friday), snapping the 5-day streak of lower fixes. Pair was last at 7.1319, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Inverted hammer price pattern may point to bullish reversal
"Bearish momentum on daily chart intact while RSI rose from oversold conditions. Inverted hammer observed on Friday’s price pattern may point to bullish reversal in the short term. We do not rule out a short term rebound in USD/CNH, given a relatively large decline."
"Resistance at 7.1460 (61.8% fibo retracement of 2024 low to 2025 high), 7.1720/40 levels (21, 50 DMAs) and 7.20 levels (100 DMA, 50% fibo). Support at 7.1160 (recent low), 7.11 levels."
"Nevertheless, we had earlier shared how the USD/CNY daily fix has been set lower over the last few months, influencing spot. In the near term, we keep a look out if policymakers will slow the pace of setting the USD/CNY fix lower as that may slow the pace of RMB gains in the interim."
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