- USD/CNH retreats from intraday as bulls take a breather after snapping three-day downtrend on Friday.
- MACD, RSI suggests continuation of slower grind to the north.
- One-month-old ascending trend line adds to the downside filters.
- Bulls need successful break of 78.6% Fibonacci retracement level to keep reins.
USD/CNH struggles to extend the previous day’s gains as it steps back from its intraday high to 6.7660 as markets in China open for Monday’s trading.
Even so, the offshore Chinese yuan (CNH) pair holds onto the latest rebound from the 21-DMA, which in turn keeps the buyers hopeful. Also favoring the bullish bias is the steady RSI and an absence of major bearish MACD.
That said, the quote remains on the way to the 78.6% Fibonacci retracement of the May-June downturn surrounding 6.7900. However, the USD/CNH upside beyond the same could refresh the yearly high marked in May, currently around 6.8375.
It should be noted that the 6.8000 round figure may also challenge the USD/CNH bulls.
Alternatively, a downside break of the 21-DMA level surrounding 6.7550 could direct the pair sellers towards the monthly support line close to 6.7470.
In a case where USD/CNH drops below 6.7470 support, it becomes vulnerable to testing the late July lows near 6.7280.
USD/CNH: Daily chart
Trend: Further upside expected