USD/CNH Price Analysis: Bounces off 50-DMA but bears keep control
- USD/CNH portrays corrective bounce near one-month low, mildly bid of late.
- 50-DMA probes sellers but clear downside break of five-week-old ascending trend line, bearish MACD signals push back buyers.
- 100-DMA, monthly high act as final defence of China Yuan pair bears.
USD/CNH prints mild gains around 6.8660 as it struggles to defend the bounce off a one-month low during early Tuesday. In doing so, the offshore Chinese Yuan (CNH) pair justifies the bearish MACD signals, as well as the downside break of a five-week-old ascending support line, now resistance, while portraying a rebound from the 50-DMA.
That said, the USD/CNH pair’s latest recovery remains elusive unless the quote stays below the support-turned-resistance line from early February, around 6.9350 by the press time.
Even if the Yuan pair crosses the 6.9350 hurdle, the 100-DMA and the monthly high, respectively around 6.9620 and 6.9970 could test the bulls.
It should be observed that the 7.0000 psychological magnet acts as an extra upside filter before giving control to the USD/CNH bulls.
On the flip side, a daily closing below the 50-DMA, around 6.8360 at the latest, appears necessary to recall the bears.
Following that, multiple tops marked during late January around 6.7900 can act as an intermediate halt before directing the USD/CNH bears towards the year 2023 low, marked in January around 6.6975.
Overall, USD/CNH remains on the bear’s radar even if the 50-DMA challenges the pair’s immediate downside.
USD/CNH: Daily chart
Trend: Further downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
