Thursday, January 28

USD/CNH Price Analysis: Recovers to the 50-hour SMA hurdle

  • USD/CNH has bounced from multi-month lows to the 50-hour SMA resistance. 
  • Intraday charts show scope for a further corrective rally.

USD/CNH is currently trading near the 50-hour Simple Moving Average (SMA) hurdle of 6.4447, having printed a low of 6.4119 on Tuesday. That was the lowest level since June 2018.

The hourly and 4-hour chart relative strength indices (RSI) have now diverged in favor of the bulls. Meanwhile, the daily chart RSI is reporting oversold conditions with a below-30 print.

As such, a stronger corrective bounce to the 4-hour chart hurdle-turned-support of 6.4927 could be seen. However, a failure to beat the 50-hour SMA may invite selling pressure, yielding a drop to fresh multi-month lows below 6.40.

Hourly chart

Trend: Corrective bounce

Credit: FX Street

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