USD/CNH technical analysis: Offshore yuan hits lowest since Nov. 30

USD/CNH has hit the highest level in over five months.
Offshore yuan slides as trade tensions continue to percolate.
Ascending 10-day MA could reverse pullbacks, if any.

Omkar Godbole FXStreet Contributor

The offshore Chinese Yuan (CNH) slipped to 6.9357 soon before press time, the lowest level since Nov. 30.

USD/CNH rally had stalled earlier this week with the pair creating a doji candle on Wednesday, a sign of bullish exhaustion. However, the decision by the US to block China’s Huawei from accessing the US market and US suppliers further escalated tensions, reviving the rally in the USD/CNH pair.

The currency pair gained 0.33% on Thursday and was last seen trading at 6.9232, having hit a 5.5-monnth high of 6.9357 earlier today.

The 5- and 10-day moving averages (MAs) continue to trend north indicating a bullish setup. The 14-day relative strength index (RSI), however, is reporting overbought conditions.

That said, with trade tensions escalating, pullbacks, if any, could be reversed by the 10-day MA support, currently at 6.8614. On the higher side, major resistance is seen at 6.98-7.00.

Daily chart

Trend: Bullish

Pivot points

1. R3 6.9696
2. R2 6.9507
3. R1 6.9394
PP 6.9205
1. S1 6.9092
2. S2 6.8903
3. S3 6.879

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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