USD/CNH Price Analysis: Refreshes multi-week low amid Chinese optimism

USD/CNH bounces off the lowest levels since March 17, remains in the red.
Stocks in China extend the previous day’s gains amid hopes of further stimulus, virus vaccine.
Oversold RSI conditions challenge the bears targeting 61.8% Fibonacci retracement.
200-day EMA offers an immediate upside barrier to watch during the pullback.

Anil Panchal FXStreet

USD/CNH pulls back from 6.9965 to 7.0080 during the early Tuesday’s trading. Even so, the pair flashes 0.08% loss from the lowest point since mid-March flashed earlier during the Asian session. While oversold RSI conditions seem to trigger the pair’s latest retracements, a sustained trading below 200-day EMA and extension of the breakdown of an ascending trend line stretched since January 20 favor the bears.

Other than the technicals, the recent rally in Chinese stocks, up over 2.0% by the press time, also exert downside pressure on the pair. Equities from Beijing are likely cheering hopes of additional stimulus and the virus vaccine after the Global Times (GT) cited the third trial of the cure in Brazil.

Read: ASX 200 Index: Bulls in charge in broad-based rally in global stocks

As a result, the sellers are currently targeting 61.8% Fibonacci retracement of January-April upside, at 6.9788, on the extended weakness of past-7.000 round-figures. During the pair’s further south-run past-the key Fibonacci retracement, the early-February lows near 6.9570 can offer intermediate halts before highlighting the March month bottom close to 6.9050.

Meanwhile, 200-day EMA and the support-turned-resistance line, respectively around 7.0390 and 7.0510, could limit the pair’s short-term recovery moves. Additionally, a downward slopping trend line from May 27, currently around 7.0630, offers additional resistance to watch.

USD/CNH daily chart

Trend: Bearish

Additional important levels

Overview
Today last price	7.009
Today Daily Change	-0.0046
Today Daily Change %	-0.07%
Today daily open	7.0136

Trends
Daily SMA20	7.0709
Daily SMA50	7.0986
Daily SMA100	7.0744
Daily SMA200	7.0424

Levels
Previous Daily High	7.0692
Previous Daily Low	7.0102
Previous Weekly High	7.088
Previous Weekly Low	7.0584
Previous Monthly High	7.1518
Previous Monthly Low	7.04
Daily Fibonacci 38.2%	7.0328
Daily Fibonacci 61.8%	7.0467
Daily Pivot Point S1	6.9928
Daily Pivot Point S2	6.972
Daily Pivot Point S3	6.9338
Daily Pivot Point R1	7.0519
Daily Pivot Point R2	7.09
Daily Pivot Point R3	7.1109

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.

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