USD/CNH Price Analysis: RSI probes further downside around 6.40 key support
|- USD/CNH bounces off yearly bottom amid nearly oversold RSI.
- 10-day SMA, two-month-old resistance line guard corrective pullback.
- PBOC intervenes with a $1.56 billion move the latest.
USD/CNH extends bounce off three-month low, around 6.4100 during early Tuesday.
Even so, RSI conditions suggest a corrective pullback towards a last Tuesday’s low near 6.4180. Though, any further upside will be challenged by a 10-day SMA level of 6.4340 and a downward sloping trend line resistance line from early April, around 6.4380.
In a case where USD/CNH bulls manage to conquer the 6.4380 hurdle, also cross the 6.4400 round figure, the monthly horizontal resistance near 6.4615 will be in the spotlight.
On the contrary, a daily closing below the 6.4000 threshold becomes necessary for the bears to visit the early 2018 levels surrounding 6.3700.
Overall, USD/CNH remains bearish but corrective pullback can’t be ruled out.
It's worth mentioning that China's central bank, People's Bank of China (PBOC), intervened in the market with a 10 billion yuan (about 1.56 billion U.S. dollars) reverse repo move. With this, the 7-day reverse repo rate is at 2.2% per the PBOC statement.
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.