- USD/CNH retreats from 11-week high as buyers flirt with horizontal hurdle stretched from May 13.
- Sustained trading beyond 21-DMA, two-month-old support line favor buyers.
- May’s top, 61.8% FE lure bulls amid firmer RSI line.
USD/CNH takes a U-turn from its 11-week high as an important resistance line challenge buyers during Tuesday’s Asian session.
However, the firmer RSI (14) and the quote’s successful trading above the 21-DMA, as well as an upward sloping support line from early June, keep the pair buyers hopeful.
That said, a clear daily closing beyond the 6.7850 resistance becomes necessary for the USD/CNH bulls to aim for the yearly high marked in May at around 6.8385.
Following that, the 61.8% Fibonacci Expansion (FE) of the pair’s late March to early June moves, near 6.9200, will be in focus.
It should be noted that January 2020 low near 6.8660 and the 6.9000 round figure could act as buffers during the USD/CNH run-up.
Alternatively, pullback moves could aim for the 21-DMA level surrounding 6.7450 before challenging the short-term support line near 6.7250.
In a case where USD/CNH drops below 6.7250, the odds of witnessing an extended south-run towards June’s low of 6.6168 can’t be ruled out.
Overall, USD/CNH remains on the way to refresh yearly top but the interemediate pullbacks can't be ruled out.
USD/CNH: Daily chart
Trend: Further upside expected