June 7, 2023

Bears keep reins, $6.3500 eyed

  • USD/CNH fades bounce off intraday low, down for the second consecutive day.
  • Pullback from 50% Fibonacci retracement, downbeat Momentum line favor sellers.
  • 200-SMA adds to the upside filters, bears brace for fresh yearly low.

USD/CNH remains on the back foot around $6.3600, down 0.10% intraday during the late Asian session on Monday.

The offshore Chinese Yuan (CNH) currency pair dropped to the lowest since December 08 the previous day. The corrective pullback, however, fails to cross the 50% Fibonacci retracement of December 17-31 downside and recalls the USD/CNH sellers.

The latest weakness eyes the latest swing low near the $6.3500 mark before directing the quote towards the previous day’s bottom surrounding $6.3380.

In a case where USD/CNH drops below $6.3380, the 2021 bottom close to $6.3300 will be crucial to watch.

Alternatively, corrective pullback remains elusive below 50% Fibo. level near $6.3660.

Even if the quote manages to cross the $6.3660 hurdle, the 200-HMA level of $6.3731 will challenge the USD/CNH bulls before directing them to the $6.3800 level to the north.

USD/CNH: Four-hour chart

Trend: Further weakness expected


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