USD/CNH: Rebound meets resistance – OCBC
|USD/CNH was a touch firmer for a 3rd consecutive session this week, tracking USD/CNY fix which was set higher again – today at 7.1108 vs 7.1089 on Tuesday and 7.1072 on Monday vs. 7.1030 last Friday. Pair was last at 7.1451, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Risk of a short term rebound in USD/CNH
"This string of higher USD/CNY fixing snapped the 5-day streak of lower fixes prior. Bearish momentum on daily chart intact but shows tentative signs of moderation while RSI rose from oversold conditions. Inverted hammer observed on Friday’s price pattern may point to bullish reversal in the short term."
"We continue to flag the risk of a short term rebound in USD/CNH, given a relatively large decline (on a multi-week horizon). Resistance here 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."
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