Sun, Aug 01, 2021 @ 11:33 GMT
HomeContributorsTechnical AnalysisUSDCNH Challenges Falling Trend Line Above 7.0000

USDCNH Challenges Falling Trend Line Above 7.0000

USDCNH seems to be stronger over the last three trading days, challenging the five-month descending trendline and the upper band of the Ichimoku cloud, near the 7.0126 resistance level.

The technical indicators are feeding prospects for a possible positive short-term move above the falling trendline, as the RSI holds well above 50 and is pointing up, while the MACD continues to strengthen in the bullish territory and above its red trigger line.  Also, in Ichimoku indicators, the red Tenkan-sen line keeps rising above the blue Kijun-sen line.

If 7.0126 proves easy to get through, the spotlight could turn to the 7.0701-7.0859 area, the former being the 23.6% Fibonacci retracement level of the upward wave from 6.6690 to 7.1944, switching the downward move to neutral.

A failure to overcome the falling trend line, the yuan could turn down, touching the 38.2% Fibo mark of 6.9937. More losses could drive the price to the 40-day simple moving average (SMA) currently at 6.9592 ahead of the 50.0% Fibo of 6.9315, overlapping with the 20-day SMA and the blue Kijun-sen line.

In the medium-term picture, USDCNH turned negative after pivoting at 7.1944. However, should the market continue the upside run, the outlook may turn brighter. 

XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading