USD/CNH Price Analysis: Struggles around 6.9200 as bears keep reins
- USD/CNH bears take a breather at one-week low, pauses two-day downtrend.
- Downside break of monthly bullish channel, 10-DMA joins bearish MACD signals to favor sellers.
- Four-month-old horizontal support area appears a tough nut to crack for bears.
USD/CNH seesaws around the weekly bottom as bears await the key US inflation data during Tuesday’s Asian session, especially after China’s return from a long weekend. With this, the offshore Chinese yuan (CNH) pair snaps a two-day downtrend while defending the 6.9200 level of late.
Even so, the pair sellers keep control as Friday’s rejection of a one-month-old bullish channel and the previous day’s downside break of the 10-DMA, the first in a month, keep sellers hopeful. Also favoring the downside bias is the impending bear cross of the MACD.
With this, the USD/CNH is likely to remain directed towards the 21-DMA support level, around 6.8930 by the press time.
Following that, a broad support area comprising May’s top and the levels marked during late August, around 6.8380-8480, will be crucial to watch for the USD/CNH bears.
In a case where the pair successfully breaks the 6.8380 support, the previous monthly low of around 6.7165 will be in focus.
Alternatively, recovery moves need validation from the 10-DMA level, at 6.9355 by the press time.
Even so, the aforementioned channel’s lower line, near 6.9680 at the latest, could act as the last defense for the USD/CNH bears before challenging the two-year high marked the last week.
USD/CNH: Daily chart
Trend: Further weakness expected