USD/CNH Price Analysis: Bulls cheer PBOC rate cut above 7.0000, bounces off 100-EMA


  • USD/CNH picks up bids to refresh intraday high, crosses immediate resistance line, 50-EMA hurdle.
  • PBOC cuts reverse repo rate by 10 bps to 2.15%.
  • Sustained bounce off 100-EMA, one-week-old horizontal support keeps buyers hopeful.
  • Sellers need validation from 61.8% Fibonacci retracement to retake control.

USD/CNH reverses the previous day’s pullback from the 26-month high while renewing the intraday top near 7.0120 during Monday’s Asian session. In doing so, the offshore Chinese yuan pair respects the People’s Bank of China’s (PBOC) rate cut to cross immediate hurdles amid a sluggish session.

That said, the Chinese central bank lowers the 14-day reverse repo rate by 10 basis points (bps) to 2.15%. “With no reverse repos maturing on Monday, China central bank injects 12 billion yuan on the day,” per Reuters.

Given the immediate break of the downward sloping resistance line from Friday, now support near the 7.0000 threshold, as well as the 50-EMA, the USD/CNH prices are likely to rush towards the recently flashed multi-day top near 7.0425.

It should, however, be noted that the tops marked during June 2020 near 7.0975 will precede the 7.1000 psychological magnet to restrict the pair’s further upside.

Meanwhile, a one-week-old horizontal area and the 100-EMA, respectively near 6.9960-50 and 6.9900, could restrict short-term declines of the USD/CNH pair.

Following that, the 61.8% Fibonacci retracement level of September 12-16 moves, near 6.9600, could challenge the bears before giving them control.

USD/CNH: Hourly chart

Trend: Further upside expected

Additional important levels

Overview
Today last price 7.0106
Today Daily Change 0.0086
Today Daily Change % 0.12%
Today daily open 7.002
 
Trends
Daily SMA20 6.929
Daily SMA50 6.829
Daily SMA100 6.7686
Daily SMA200 6.573
 
Levels
Previous Daily High 7.0426
Previous Daily Low 6.9976
Previous Weekly High 7.0426
Previous Weekly Low 6.9108
Previous Monthly High 6.9326
Previous Monthly Low 6.7164
Daily Fibonacci 38.2% 7.0148
Daily Fibonacci 61.8% 7.0254
Daily Pivot Point S1 6.9856
Daily Pivot Point S2 6.9692
Daily Pivot Point S3 6.9407
Daily Pivot Point R1 7.0305
Daily Pivot Point R2 7.059
Daily Pivot Point R3 7.0754

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD consolidates weekly gains above 1.1150

EUR/USD consolidates weekly gains above 1.1150

EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.

EUR/USD News
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains

GBP/USD stabilizes near 1.3300, looks to post strong weekly gains

GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains. 

GBP/USD News
Gold extends rally to new record-high above $2,610

Gold extends rally to new record-high above $2,610

Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.

Gold News
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap

Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap

SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.

Read more
Bank of Japan set to keep rates on hold after July’s hike shocked markets

Bank of Japan set to keep rates on hold after July’s hike shocked markets

The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session. 

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures