USD/CNH Price Analysis: Further downside towards sub-6.9000 zone appears compelling
- USD/CNH remains pressured at three-month low, down for the sixth consecutive day.
- Clear break of multi-day-old support line, bearish MACD signals favor sellers.
- Lows marked in October, November guard immediate upside.
USD/CNH bears keep the reins during early Tuesday, printing a six-day south-run around 6.9570 by the press time. In doing so, the offshore Chinese Yuan (CNH) pair justifies the previous week’s downside break of an ascending trend line from April.
Given bearish MACD signals favoring the USD/CNH pair’s trend line break, the sellers are well-set to challenge the monthly low marked the previous day around 6.9300.
Following that, September 10 swing low near 6.9100 may act as an intermediate halt during the likely fall towards a six-month-old ascending support line, close to 6.8940 at the latest.
In a case where USD/CNH remains bearish past 6.8940, the 50% Fibonacci retracement level of the pair’s run-up from late March to October, around 6.8600, will precede the 200-DMA support near 6.8015 to challenge the further downside.
Alternatively, recovery remains elusive unless the quote stays below the support-turned-resistance line stretched from April, near 7.0700 by the press time.
That said, an area comprising lows marked during November and October, around 7.0130-200, restricts the pair’s immediate upside.
It’s worth noting that multiple hurdles surrounding 7.2600-2700 could question the USD/CNH bulls before giving them control.
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.
