- USD/CNH retreats from four-week-old horizontal resistance, tests weekly support line.
- Bullish MACD signals, sustained trading above 200-SMA keeps buyers hopeful.
- Buyers have multiple hurdles to cross stay on merit versus the sellers.
USD/CNH consolidates recent gains around the monthly high, retreating from a short-term horizontal resistance towards 6.7700 during Tuesday’s Asian session.
In doing so, the offshore Chinese yuan (CNH) pair eases from a four-week-long hurdle as sellers attack the weekly support line near the 6.7700 threshold. Also challenging the USD/CNH bulls is the market's positioning ahead of the Wednesday's Federal Open Market Committee (FOMC). Additionally, growing chatters surrounding the People's Bank of China's (PBOC) next move could also be linked to the quote's latest pullback.
It’s worth noting, however, that the bullish MACD signals and the quote’s ability to stay beyond the 200-SMA keep the USD/CNH buyers hopeful until the prices drop below the stated key SMA level of 6.7100.
Even so, a downside break of the immediate support can direct the 61.8% and 50% Fibonacci retracements of the May-June downturn, respectively around 6.7540 and 6.7280.
Alternatively, recovery moves need to cross the nearby resistance surrounding 6.7865-85, as well as cross the 6.7900 round figure, to recall the USD/CNH buyers.
Following that, multiple resistances around 6.8200 and 6.8300 could probe the pair bulls before directing them towards the yearly peak of 6.8384.
Overall, USD/CNH remains on the bull's radar ahead of this week's key data/events, despite the latest profit-booking moves.
USD/CNH: Four-hour chart
Trend: Pullback expected
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