- USD/CNH bulls prod 200-SMA during two-day winning streak, clings to mild gains of late.
- Looming bull cross on MACD, sustained trading past short-term support line favors Chinese Yuan sellers.
- Three-week-old descending resistance line adds to the upside filters.
USD/CNH struggles to defend buyers around 7.1980 heading into Monday’s European session, jostling with the 200-SMA of late. In doing so, the offshore Chinese Yuan (CNH) justifies the looming bull cross on the MACD indicator by staying beyond a fortnight-old rising support line.
It’s worth noting that the 38.2% Fibonacci retracement of June 02-30 upside, near 7.2020, will act as an extra upside filter ahead of directing the USD/CNH buyers toward the key resistance line stretched from June 30, close to 7.2270.
In a case where the Chinese Yuan remains weak past 7.2270, the odds of witnessing its slump toward the yearly bottom marked in June surrounding 7.2860 can’t be ruled out.
On the other hand, a convergence of the 50% Fibonacci retracement and an upward-sloping support line from July 14 restricts the immediate downside of the USD/CNH pair near 7.1760.
Following that, the 61.8% Fibonacci retracement, also known as the golden Fibonacci ratio, can challenge the offshore Yuan price near 7.1500.
Should the USD/CNH bears keep the reins past 7.1500, a five-week-old rising support line close to 7.1380 will act as the last defense of the buyers.
Overall, the USD/CNH remains on the bull’s radar even if the 200-SMA challenges the pair’s immediate upside.
USD/CNH: Four-hour chart
Trend: Limited upside expected