USD/CNH Technical Analysis: Eyes 7.00, PBOC fix likely bolstered the bullish chart setup

The PBOC set the yuan reference rate at 6.9510 - the highest level since January 2017.
The weaker fix has likely bolstered the bullish chart setup: the pair has found acceptance above 6.9584 (August high) and the bullish breakout is backed by the ascending (bullish) 5-day and 10-day exponential moving averages (EMAs). The 14-day relative strength index (RSI) is biased bullish and is well short of the July high of 89.00.
Over on the 4-hour chart, 50-, 100-, and 200-hour EMAs are trending north. The RSI is biased bullish and rising, having established a base around 50.00 in the last four weeks.
The currency pair looks set to test the psychological level of 7.00. Watch out for a sudden bearish reversal from above 7.00, as the PBOC may intervene to halt the slide in the Chinese currency.

Omkar Godbole FXStreet Contributor

Daily Chart

4-hour Chart

Spot Rate: 6.9730

Daily High: 6.9735

Daily Low: 6.9517

Trend: Bullish

Resistance

R1: 6.9861 (December 2016 high)

R2: 7.00 (psychological hurdle)

Support

S1: 6.9527 (5-day EMA)

S2: 6.9396 (10-day EMA)

S3: 6.90 (psychological support)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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