- USD/CNH is trapped in a narrow range on the daily chart.
- The MACD histogram suggests scope for a range breakout.
USD/CNH's daily chart MACD histogram, an indicator used to identify trend changes and trend strength, has crossed above zero, confirming a bullish reversal.
The indicator's bullish turn suggests the pair could soon breach the two-week-long trading range of 7.04 to 7.0974 to the higher side. The range breakout, if confirmed, would create room for a rally to 7.1548 (target as per the measured move method).
However, the 14-day relative strength index (RSI) is still hovering in bearish territory below 50.00. Also, the MACD histogram is based on moving averages (backward-looking indicators) and often lags prices and traps traders on the wrong side of the market.
The outlook would turn bearish if the range play ends with acceptance under 7.04. At press time, the pair is trading at 7.078, representing marginal losses on the day. The immediate bias would remain neutral as long as the pair stuck inside the trading range of 7.04 to 7.0974.
Daily chart
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Trend: Neutral
Technical levels
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