The USD/CNH currency pair has extended its previous day’s rebound from the 7.1305-7.1300 range, which marked a one-week low, gaining modest traction during the Asian trading session on Thursday. Current spot prices remain near the 7.1560 level, though mixed technical signals suggest caution before anticipating further upward movement.
The pair has demonstrated some resilience below the 23.6% Fibonacci retracement level of the July-August decline. This suggests a favorable trend for bullish traders. However, daily chart oscillators remain deeply negative and have not yet entered the oversold zone. As such, any additional gains are likely to attract new selling pressure near the 7.1845-7.1850 region, with resistance expected around the 7.1895-7.1900 zone.
This resistance is followed by the 50% Fibonacci retracement level at approximately 7.1975-7.1980, which is now a crucial pivot point. A sustained move beyond this barrier would indicate that the USD/CNH pair has potentially bottomed out near the 7.0835 level, its lowest since June 2023, and could set the stage for a significant upward trend.
Conversely, the 7.1500 level is expected to provide immediate support. A drop below this threshold could accelerate declines, potentially challenging the multi-month low around 7.0835. Continued selling pressure could serve as a trigger for bearish traders, leading to an extension of the recent sharp pullback from the year-to-date peak reached in July.
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