USD/CNH Price Analysis: Pullback from fortnight-old resistance eyes 100-SMA retest
- USD/CNH takes offers to renew intraday low, snaps two-day uptrend at weekly top.
- China’s Industrial Profits rose 3.5% during January-April versus 8.5% prior.
- Overbought RSI, key hurdles triggered the latest retreat suggesting further weakness towards 100-SMA.
- Previous resistance from early acts as an extra filter to the south, bulls need to break 6.7900 to retake control.
USD/CNH remains on the back foot around the intraday low of 6.7515 as sellers cheer the broad US dollar weakness, by also ignoring the downbeat China data during Friday’s Asian session.
That said, China’s Industrial Profits for the January-April period dropped to 3.5% versus 8.5% prior whereas the figures for April slumped to -8.5% versus 12.2% previous gains.
Technically, multiple levels marked since May 12, near 6.7860-7900, joined overbought RSI conditions to trigger the latest AUD/USD weakness.
Also keeping the sellers hopeful is the pair’s inability to cross the previous support line from late April, around 6.7750 by the press time.
The quote’s latest weakness eyes the 100-SMA level of 6.7390. However, the previous resistance line from early May, close to 6.7100, could test the bears afterward.
Should USD/CNH prices drop below 6.7100, the 61.8% Fibonacci retracement of late April to early May upside, near 6.6575, will be in focus.
USD/CNH: Four-hour chart
Trend: Further weakness expected