USD/CNH Price Analysis: Extends pullback from weekly resistance below 7.3200 even as China data disappoints
- USD/CNH renews intraday low, stays defensive after reversing from short-term key resistance line.
- China’s Caixin Services PMI dropped to five-month low.
- Key HMAs, RSI conditions suggest a bumpy road for the bears.
USD/CNH ticks down to refresh intraday low near 7.3160 after China reported downbeat services activity data during early Thursday.
In doing so, the offshore Chinese currency (CNH) pair consolidates the Fed-inspired gains but struggles to extend the late Wednesday’s pullback from a one-week-old descending resistance line.
That said, China’s Caixin/S&P Global Services PMI for October dropped to the lowest level in five months while flashing 48.4 figure versus 49.3 prior.
Despite the quote’s latest inaction, the bearish MACD signals and the U-turn from a short-term key resistance line direct USD/CNH sellers toward the 50-HMA and 100-HMA support levels, respectively near 7.3050 and 7.2980.
However, an upward-sloping support line from Friday, near 7.2840, joins the ascending support line on RSI (14) to challenge the pair bears afterward.
Alternatively, recovery moves need to cross the aforementioned resistance line, close to 7.3485, to convince USD/CNH buyers.
Following that, a run-up towards the all-time high marked in October around 7.3750 can’t be ruled out.
To sum up, USD/CNH justifies short-term bearish technical signals despite weaker fundamentals to support sellers. Though, the downside room appears limited.
USD/CNH: Hourly chart
Trend: Limited downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
