USD/CNH Price Analysis: Recovery remains elusive below 7.0265-70 resistance confluence
|- USD/CNH picks up bids to extend early week rebound from the key Fibonacci retracement level.
- Convergence of 100-DMA, previous support line from October challenges buyers.
- MACD, RSI conditions suggest further hardships for bulls.
USD/CNH prints a two-day uptrend around 6.9870 while extending the week-start rebound from the lowest levels in three months.
That said, the offshore Chinese Yuan (CNH) pair prints mild gains while defending the bounce off the 61.8% Fibonacci retracement level of the August-October upside.
Although the recovery moves from the key Fibonacci retracement level, also known as the golden ratio, teases the USD/CNH bulls, the downbeat RSI (14) and bearish MACD signals challenge the quote’s further upside.
Also raising doubts on the USD/CNH run-up is the joint of the 100-DMA and the support-turned-resistance line from October, near 7.0265-70.
It’s worth noting that the pair’s advances past 7.0270 need validation from the 50% Fibonacci retracement level surrounding 7.0465 before giving control to the buyers.
In that case, a gradual run-up towards the late October swing low near 7.1660 can’t be ruled out.
Alternatively, a daily closing below the 61.8% Fibonacci retracement level of 6.9688 could quickly drag the USD/CNH prices to the latest trough surrounding 6.9300.
Following that, the lows marked during mid-September, close to 6.9100, acts as the last defense of the USD/CNH bulls.
USD/CNH: Daily chart
Trend: Pullback expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.