USD/CNH Price Analysis: Traders seem non-committed, 7.2700 holds the key for bulls

USD/CNH lacks any firm intraday direction and remains confined in a range on Tuesday.
A sustained break and acceptance below 7.2700 will pave the way for additional losses.
Bulls need to wait for a move beyond the 7.3000 before positioning for any further upside.

Haresh Menghani FXStreet

The USD/CNH pair struggles to gain any meaningful traction on Tuesday and oscillates in a narrow band, around the 7.2900 mark through the Asian session.

The People's Bank of China (PBoC) has been persistently setting stronger-than-expected daily-mid-points for the Chinese Yuan, which, along with a modest US Dollar (USD) weakness, act as a headwind for the USD/CNH pair. The downside, however, remains cushioned in the wake of growing worries about the worsening economic conditions in China. Apart from this, expectations that the Federal Reserve (Fed) will keep interest rates higher for longer favour the USD bulls and suggest that the path of least hurdle for spot prices is to the upside.

From a technical perspective, the USD/CNH pair has been showing some resilience below the 7.2700 round figure since early last week. Hence, acceptance below the said level might prompt some technical selling and pave the way for an extension of the recent pullback from the highest level since April 2022, around the 7.3500 touched earlier this month. Spot prices might then turn vulnerable to accelerate the downward trajectory towards testing the next relevant support near the 7.2300 area en route to the 7.2200-7.2180 region and the 7.2100.

On the flip side, bulls might now wait for a sustained strength beyond the 7.3000-7.3050 region before placing fresh bets, above which the USD/CNH pair could aim to challenge the 7.3355 supply zone. Some follow-through buying beyond the YTD peak will be seen as a fresh trigger for bullish traders and expose the 2022 swing high, around the 7.3750 region with some intermediate resistance near the 7.3600.

USD/CNH daily chart

Technical levels to watch

USD/CNH

Overview
Today last price	7.2892
Today Daily Change	-0.0040
Today Daily Change %	-0.05
Today daily open	7.2932

Trends
Daily SMA20	7.2615
Daily SMA50	7.2261
Daily SMA100	7.1176
Daily SMA200	7.0092

Levels
Previous Daily High	7.3056
Previous Daily Low	7.2696
Previous Weekly High	7.3362
Previous Weekly Low	7.2676
Previous Monthly High	7.2744
Previous Monthly Low	7.116
Daily Fibonacci 38.2%	7.2834
Daily Fibonacci 61.8%	7.2919
Daily Pivot Point S1	7.2734
Daily Pivot Point S2	7.2535
Daily Pivot Point S3	7.2374
Daily Pivot Point R1	7.3094
Daily Pivot Point R2	7.3255
Daily Pivot Point R3	7.3454

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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