USD/CNH defends crucial trendline support on heightened trade tensions

The offshore yuan (CNH) is under pressure as US Vice President on Saturday vowed no end to tariffs until China bows.
The USD/CNH bounced off the trendline connecting the Aug. 27 and Sept. 21 lows, saving the day for the bulls.

Omkar Godbole FXStreet Contributor

The offshore yuan (CNH) is reporting losses at press time, courtesy of heightened US-China trade tensions.

As of writing, the USD/CNH pair is trading at 6.9279, having defended the trendline rising from the Aug. 27 low.

The US Vice President Mike Pence said on Saturday that the Trump administration will not back down from its trade dispute with China, and might even double its tariffs unless Beijing bows to the US demands.

The harshly worded speech at an Asia Pacific Economic Co-operation (APEC) summit in Papua New Guinea, has likely triggered risk aversion in the markets. This is evident from the 0.35 percent drop in the S&P 500 futures. That risk-off has likely put a haven bid under the greenback.

A bullish reversal, however, would be confirmed after the pair violates lower high pattern with a move above 6.9694 (Nov. 13 high). Meanwhile, a close below the ascending trendline would validate the bearish divergence of the 14-week relative strength index (RSI) and allow a deeper drop.

USD/CNH Technical Levels

USD/CNH

Overview:
    Last Price: 6.9278
    Daily change: 98 pips
    Daily change: 0.142%
    Daily Open: 6.918
Trends:
    Daily SMA20: 6.94
    Daily SMA50: 6.908
    Daily SMA100: 6.853
    Daily SMA200: 6.6039
Levels:
    Daily High: 6.9454
    Daily Low: 6.9106
    Weekly High: 6.9701
    Weekly Low: 6.9106
    Monthly High: 6.9798
    Monthly Low: 6.8674
    Daily Fibonacci 38.2%: 6.9239
    Daily Fibonacci 61.8%: 6.9321
    Daily Pivot Point S1: 6.9039
    Daily Pivot Point S2: 6.8899
    Daily Pivot Point S3: 6.8691
    Daily Pivot Point R1: 6.9387
    Daily Pivot Point R2: 6.9595
    Daily Pivot Point R3: 6.9735

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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