USD/CNH Price Analysis: Retreats from weekly hurdle on firmer China CPI

USD/CNH extends pullback from 19-month high on strong China inflation data.
China CPI rose 2.1%, PPI grew 8.0%, both figures crossed market consensus.
Sluggish RSI, a convergence of 100-HMA and short-term rising trend line challenge bears.

Anil Panchal FXStreet

USD/CNH justifies strong-than-expected China inflation data by reversing from the intraday high during Wednesday’s Asian session. That said, the quote takes offers to renew daily low around 6.7400 by the press time.

China’s Consumer Price Index (CPI) rose past 1.8% market consensus to 2.1% YoY whereas the Producer Price Index (PPI) crossed 7.7% expectations with the 8.0% yearly figures.

It’s worth noting that the offshore Chinese currency (CNH) pair rallied to the highest since October 2020 before retreating from 6.7765 during the early week.

Considering the upbeat inflation numbers and the pair’s failures to refresh the multi-day high, the USD/CNH prices are likely to decline towards the immediate support, namely May 06 peak surrounding 6.7345.

However, the 100-HMA and ascending support line from May 05 portrays 6.7180 as a tough nut to crack for the pair sellers. Also acting as important support is the 200-HMA level, near 6.6880 by the press time.

Alternatively, recovery moves need to cross the immediate resistance line, at 6.7615, before challenging the multi-day high flashed on Monday around 6.7765.

In a case where USD/CNH bulls keep reins past 6.7765, the 61.8% Fibonacci Expansion (FE) of May 04-10 moves, near 6.8120, will be on their radars.

USD/CNH: Hourly chart

Trend: Pullback expected

Additional important levels

Overview
Today last price	6.7472
Today Daily Change	-0.0038
Today Daily Change %	-0.06%
Today daily open	6.751

Trends
Daily SMA20	6.5649
Daily SMA50	6.4432
Daily SMA100	6.3993
Daily SMA200	6.4127

Levels
Previous Daily High	6.776
Previous Daily Low	6.7098
Previous Weekly High	6.7342
Previous Weekly Low	6.6116
Previous Monthly High	6.694
Previous Monthly Low	6.3512
Daily Fibonacci 38.2%	6.7351
Daily Fibonacci 61.8%	6.7508
Daily Pivot Point S1	6.7152
Daily Pivot Point S2	6.6794
Daily Pivot Point S3	6.649
Daily Pivot Point R1	6.7814
Daily Pivot Point R2	6.8118
Daily Pivot Point R3	6.8476

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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