USD/CNH Price Analysis: Yuan bears take a breather at 6.5-month low within channel pattern, Fed eyed
- USD/CNH seesaws at the highest levels since late November 2022, mildly offered of late.
- Overbought RSI conditions prod buyers within one-week-old rising trend channel.
- Hopes of hawkish Fed halt, bullish MACD signals join sustained trading above the key moving average to favor Yuan bears.
USD/CNH struggles to extend a three-day uptrend as it retreats from the highest levels in nearly eight months on the key Federal Open Market Committee (FOMC) monetary policy meeting day. That said, the offshore Chinese Yuan (CNH) pair prints mild losses near 7.1720 by the press time, after rising to the highest levels since April 2022 with the latest peak of 7.1788.
It’s worth noting that the overbought RSI conditions join the pre-Fed anxiety to challenge the USD/CNH traders within a one-week-old rising trend channel, currently between 7.2020 and 7.1350 at the latest. Adding strength to the 7.1350 support level is the 50-SMA.
In a case where the USD/CNH drops below 7.1350, the previous resistance line stretched from late April, close to 7.0680, will precede a two-month-old rising support line, surrounding 7.0570 as we write, to please the offshore Chinese Yuan buyers.
However, the 200-SMA level of 7.0380 acts as the last defense of the USD/CNH bulls before giving control to the bears.
On the flip side, USD/CNH run-up needs validation from the latest high of around 7.1788, as well as the 7.1800 round figure.
Following that, the 7.2000 psychological magnet may prod the pair buyers before directing them to the short-term rising channel’s top line, close to 7.2020.
Should the offshore Chinese Yuan (CNH) remains bearish past 7.2020, the odds of witnessing the pair’s rally towards the late November 2022 peak of near 7.2600 can’t be ruled out.
USD/CNH: Four-hour chart
Trend: Pullback expected
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.
