Fall to 10-week low on optimistic China
- USD / CNH remains depressed around multi-day low after Caixin’s strong services PMI in China, trade figures for April.
- Sustained trading below 100-SMA, bearish MACD favors sellers.
USD / CNH takes offers around 6.4560, down 0.13% intraday, while falling back to its lowest since late February in Friday’s pre-European session.
While the pair’s sustained trading below the 100-day SMA and bearish MACD joins the weakness of the US dollar, in a climate of risk favor pair sellers, Caixin’s bullish services PMI and trade data from the China appear to be bidding under the CNH lately.
Against this backdrop, USD / CNH bears keep their eyes on the annual horizontal support line around 6.4400 as close key levels. However, the pair’s inability to bounce off key support could drag it down to February’s low, also the annual low, near 6.4000.
If the USD / CHF continues to trade south below the 6.4000 level, the 61.8% Fibonacci (FE) expansion from November to February, followed by the rebound through March 30, will be crucial support to watch around 6.3540-35.
Meanwhile, the corrective pullback must cross the 100-day SMA level of 6.4925 before attacking the 23.6% Fibonacci retracement level of the pair’s decline from late September 2020 to February 2021, near 6.5060.
Overall, USD / CNH bears hold the reins until the pair breaks through the April high of 6.5876.
USD / CNH Daily Chart