- USD/CNH reverses early Asian losses following a bearish candlestick formation.
- MACD conditions, short-term falling trend line also favor sellers.
- Bulls need validation from 61.8% Fibonacci retracement, September’s low.
USD/CNH picks up bids to $6.3955, recovering early-day losses ahead of the European session on Friday.
The offshore Chinese currency (CNH) pair printed a bearish Doji candlestick the previous day, challenging a continuation of the rebound from a four-month low flashed earlier in the week.
Also favoring the sellers is the quote’s sustained trading below a downward sloping trend line from October 12 and 61.8% Fibonacci retracement (Fibo.) level of May-July upside amid bearish MACD signals.
That being said, the USD/CNH prices may initially test the $6.3800 area during fresh downside ahead of challenging the monthly low of $6.3685.
Following that, the yearly low marked in May, around $6.3525, will be in focus.
Alternatively, the stated resistance line and the key Fibo. level, respectively near $6.4135 and $6.4200, will challenge the quote’s recovery moves.
It should be noted, however, that the USD/CNH bulls should remain cautious until the quote stays below September’s low of $6.4245.
USD/CNH: Daily chart
Trend: Further weakness expected
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