- USD/CNH remains pressured on a day despite recent bouncing off intraday low.
- Clear break of previous support line, U-turn from 10-DMA favor China offshore Yuan buyers.
- RSI, MACD conditions also suggest further downside towards 50-DMA support.
- Bulls need validation from 7.2360-70 to retake control.
USD/CNH pares intraday losses around 7.2800 as China’s offshore Yuan (CNH) traders seek fresh clues to defend the daily losses during early Monday. In doing so, the Chinese currency cheers the broad pullback in the US Dollar amid a fresh bout of stimulus news from Beijing.
Technically, the pair’s downbeat break of a one-month-old previous support line joins the repeated failures to cross the 10-DMA immediate hurdle to keep the USD/CNH bears hopeful.
Also, the looming bear cross on the MACD and a downward-sloping RSI (14) line from the overbought territory weigh on the USD/CNH prices.
With this, the quote’s further downside toward the late July swing high of around 7.2370 appears imminent.
However, the 50-DMA and an ascending support line from late March, respectively near 7.2260 and 7.1920, can challenge the USD/CNH bears afterward.
On the contrary, a daily closing beyond the 10-DMA level surrounding 7.3020 can propel the USD/CNH price towards the five-month-old support-turned-resistance line of near 7.3160.
Even so, a horizontal area comprising multiple tops marked since August 16, close to 7.2370-60, can challenge the USD/CNH bulls before refreshing the yearly high.
USD/CNH: Daily chart
Trend: Further downside expected
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