USD/CNH Price Analysis: Probes 12-day-old bullish channel around 7.1800
- USD/CNH holds lower ground near intraday bottom, snaps four-day uptrend.
- Bearish MACD signals favor sellers but 100-SMA acts as extra filter to the south.
- Monthly resistance line holds the key to buyer’s dominance.
USD/CNH takes offers as bears attack 7.1800 to defy the fortnight-old bullish chart formation during early Tuesday. In doing so, the offshore China Yuan (CNH) prints the first daily loss in five.
That said, the Moving Average Convergence and Divergence (MACD) indicator hints at the pair’s further weakness as it flashes the bearish signals when sellers poke the support line of the upward-sloping trend channel, around 7.1780 by the press time.
It should be noted, however, that the 100-SMA level of 7.1600, acts as the extra challenge for the USD/CNH bears before taking control.
Following that, a southward trajectory towards the monthly low of 7.0194 can’t be ruled out. Also acting as the short-term key support is the previous monthly low near 7.0126.
Meanwhile, recovery moves could aim for the 7.2000 round figures before the stated channel’s upper line, close to 7.2780 at the latest.
In a case where the USD/CNH buyers keep the reins past 7.2780, the 7.2800 round figure and a downward sloping resistance line from late October, near 7.2820, could challenge the upside momentum before trying to refresh the record high marked in the last month.
USD/CNH: Four-hour chart
Trend: Limited downside expected