USDCNH had a strong bearish start on Thursday, with the price falling below a crucial support of the 38.2%Fibonacci retracement level of the upleg from 6.2350 to 6.9781, near 6.6949, creating a fresh seven-month low of 6.6861.

From the technical point of view, the RSI is flattening in bearish territory, while the MACD also supports a bearish picture, since it continues to hold beneath the zero line and trigger lines.

Should prices drop below the seven-month low, they could hit the support area between6.5980 – 6.6061, which encapsulates the 50.0% Fibonacci region. An extension of the bearish structure would open the way towards the 61.8% Fibonacci of 6.5188.

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If the market manages to pick up speed, the 6.7360 resistance and the 20-day simple moving average (SMA), currently at 6.7553 could offer nearby resistance ahead of the 40-day SMA, which stands near 6.7854. Slightly above this line, the 23.6% Fibonacci of 6.8030 could act as strong resistance as well before turning the focus at the 6.8245 barrier.

In the medium-term, the outlook remains negative since prices hold below all the moving average lines and have been creating lower lows and lower highs following the pullback from the 10-month high of 6.9781.

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