USD/CNH Price Analysis: Stays on the way to 7.1850 SMA hurdle
|- USD/CNH extends the rebound from resistance-turned-support line towards 100-SMA.
- RSI suggests further grinding below the key Simple Moving Averages (SMAs).
- 200-SMA adds to the upside filters, sellers need validation from 7.1180-60 support confluence.
USD/CNH buyers keep the reins around 7.1630 during early Wednesday morning in Europe, defending Tuesday’s U-turn from the previous resistance line.
In doing so, the offshore Chinese Yuan (CNH) reverses the previous day’s losses while bracing for the 100-SMA hurdle surrounding 7.1850.
Given the steady prints of the Relative Strength Index (RSI), placed at 14, the latest recovery is likely to prevail.
Also favoring the USD/CNH bulls is the pair’s sustained trading beyond the convergence of the ascending trend line from November 13 and the aforementioned resistance-turned-support, around 7.1180-60.
If the quote drops below 7.1160, the odds of witnessing a slump toward the monthly low of 7.0195 can’t be ruled out. However, October’s low of 7.0126 could challenge the USD/CNH pair’s further declines.
Alternatively, the 200-SMA level of 7.2105 acts as an extra filter towards the north, in addition to the 100-SMA hurdle near 7.1850.
Should the USD/CNH bulls keep the reins past 7.2105, the 61.8% Fibonacci retracement of the pair’s downturn between October 25 to November 15, around 7.2400, will precede the November 09 swing high of 7.2800 to please the buyers.
USD/CNH: Four-hour chart
Trend: Further upside expected
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