- USD/CNH rebounds from three-week lows but keeps the key trend line breakdown.
- 100-DMA, 38.2% Fibonacci retracement restricts immediate downside.
- Bearish MACD joins support break to favor sellers.
USD/CNH snaps a three-week downtrend, up 0.12% on a day around 6.4775-80 ahead of Wednesday’s European session.
In doing so, the offshore Chinese currency (CNH) pair aims to regain its place above the previous support line from June 10. However, bearish MACD and sustained break of the key trend line support keep the sellers hopeful.
Hence, a clear upside break of 6.4810 becomes necessary for the USD/CNH buyers to retake controls.
Following that, the monthly peak around 6.5100 and July’s top surrounding 6.5290 will gain the market’s attention.
Meanwhile, sellers also have a tough task breaking a convergence of 100-DMA and 38.2% Fibonacci retracement of May–July upside, around 6.4620-15.
Also acting as a downside filter is the last month’s low near 6.4500, a break of which will direct the quote further south towards the 50% and 61.8% Fibonacci retracement levels, respectively around 6.4400 and 6.4200.
USD/CNH: Daily chart
Trend: Pullback expected
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