USD/CNH Price Analysis: Seller exhaustion at three-month lows
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- USD/CNH is sidelined in Asia, having printed three-month lows on Thursday.
- Thursday's Doji candle represents downtrend exhaustion and neutralizes immediate bearish view,
USD/CNH dropped to a three-month low of 6.9809 on Thursday and ended up creating a Doji candle on the daily chart.
A Doji comprises long shadows, representing two-way price action and a small body, representing a flat close. Usually, it is reflective of indecision in the marketplace. In this case, however, the Doji candle has appeared at multi-month lows and following a sell-off from the May 27 high of 7.1964 and represents seller exhaustion.
However, a reversal higher would be confirmed if the pair ends Friday above the Doji candle’s high of 7.00. Alternatively, a close below the Doji candle’s low of 6.9809 would imply a continuation of the sell-off from the highs seen in May.
At press time, the pair is trading largely unchanged on the day at 6.9969.
Daily chart
Trend: Seller exhaustion
Technical levels
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