USD/CNH Price Analysis: Retreats from 200-DMA to snap three-day uptrend above 6.9300
- USD/CNH prints the first daily loss in four as it eases from the highest levels in six weeks.
- Key DMA, nearly overbought RSI (14) challenges further upside of the offshore Chinese Yuan (CNH) pair.
- Four-month-old symmetrical triangle restricts short-term moves, ascending trend line from early February adds to downside filters.
USD/CNH drops towards 6.9300 while defying the three-day winning streak ahead of Wednesday’s European session, down 0.16% intraday to 6.9320 at the latest. In doing so, the offshore Chinese Yuan (CNH) pair reverses from its highest levels in 1.5 months.
That said, a failure to cross the 200-DMA triggered the USD/CNH pair’s pullback move. Adding strength to the retreat is the nearly overbought RSI (14) conditions.
As a result, the quote’s further declines towards an upward-sloping support line from February 02, close to 6.8820 at the latest, can’t be ruled out.
However, the bottom line of the four-month-old symmetrical triangle, between 6.9840 and 6.8465, appears strong hurdles for the USD/CNH pair traders to tackle before suggesting clear moves.
On the flip side, a daily closing beyond the 200-DMA level of 6.9520 could direct the USD/CNH bulls toward the stated triangle’s top line surrounding 6.9840.
It’s worth noting that the USD/CNH bulls need validation from the November 2022 bottom surrounding 7.0200 to retake control whereas multiple levels around the 6.8000 round figure can check the pair sellers past 6.8465.
Overall, USD/CNH is likely to remain within the multi-day-old symmetrical triangle.
USD/CNH: Daily chart
Trend: Limited 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.
