USD/CNH: Bounce from rising trendline keeps bulls in the game

USD/CNH remains on the hunt for new highs, courtesy of the rebound from the ascending trendline.
Bullish momentum has weakened somewhat, moving average (MA) studies indicate.

Omkar Godbole FXStreet Contributor

The USD/CNH pair defended the rising trendline (drawn from the June 14 low and July 10 low) on Monday, keeping the bulls in the game.

At press time, the pair is trading at 6.8667 and could rise further to 6.90 (upper Bollinger Band - standard deviation of +2, -2 on the 20-day moving average), although the narrowing gap between the intraday moving averages (50-hour, 100-hour and 200-hour) indicates the bullish momentum is weakening.

Further, the People's Bank of China (PBOC) announced a slightly stronger CNY (onshore yuan) daily fix, and that may cap the upside in the USD/CNH pair. That said, a short-term bull-to-bear trend change is seen only below the rising trendline, according to technical charts.

USD/CNH Technical Levels

Resistance: 6.8823 (Aug. 2 high), 6.90 (Bollinger band hurdle), 6.9124 (Aug. 3 high)

Support: 6.8576 (previous day's low), 6.8409 (rising trendline support), 6.7884 (ascending 20-day moving average)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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