USD/CNH Price Analysis: Sellers fail to beat 200-day SMA support for second day

USD/CNH bounces from long-term support for second day.
Defense of key support neutralizes immediate bearish bias.

Omkar Godbole FXStreet Contributor

The widely-tracked 200-day simple moving average (SMA) is capping downside in USD/CNH for the second straight day.

The pair is currently trading near 7.0580, having put in a session low just below the 200-day SMA of 7.0466 during the early Asian trading hours. Essentially, sellers failed to establish a strong foothold below the key average. A similar action was seen on Wednesday.

The repeated bear failure near the 200-day SMA has aborted the immediate bearish outlook and shifted risk in favor of a corrective bounce to 7.0750.

The bias, however, would turn bullish only if the oversold bounce ends up clearing the resistance of the lower high, currently at 7.0914.

Meanwhile, on the downside, a daily close under the 200-day SMA is needed to restore the bearish outlook.

Daily chart

Trend: Neutral

Technical levels

1. R3 7.1211
2. R2 7.102
3. R1 7.0782
PP 7.0591
1. S1 7.0353
2. S2 7.0162
3. S3 6.9924

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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