USD/CNH Price Analysis: Bulls attack 11-month old hurdle on PBOC inaction
- USD/CNH refreshes five-month high during three-day uptrend on PBOC’s status-quo.
- PBOC refrains from rate-cut, renews medium-term loans during the latest policy meeting.
- Descending trend line from April 2021, 200-DMA challenge bulls amid overbought RSI.
- Previous resistance line, 100-DMA restricts short-term downside.
USD/CNH rises to the highest levels since late October following the People’s Bank of China’s (PBOC) status-quo during Tuesday’s Asian session. That said, the offshore Chinese yuan (CNH) currency pair rises 0.20% intraday around 6.4060 by the press time.
The PBOC surprised markets with no change in the benchmark rates but didn’t refrain from injecting liquidity.
Read: PBOC leaves its MLF rate unchanged, Chinese stocks selling off to lowest levels since 2016
With this, the USD/CNH prices stretched the previous day’s upside break of the 100-DMA and a descending trend line from July 2021 towards poking an 11-month-long resistance line around 6.4100.
Even so, the overbought RSI conditions challenge the pair buyers, as well as the 200-DMA level near 6.4115.
In a case where the USD/CNH prices rally beyond 6.4115, a rally towards the late 2021 peak of 6.4880 can’t be ruled out.
Meanwhile, pullback moves remain elusive until decline below the 6.3670-60 area comprising the previous resistance line and the 100-DMA.
Following that, the year 2021 low near 6.3300 may offer an intermediate halt during the south-run targeting February’s bottom of 6.3060 and the 6.3000 round figure.
USD/CNH: Daily chart
Trend: Pullback expected