USD/CNH tests the immediate support at the lower boundary of the rectangle around 168.80.
The 14-day Relative Strength Index remains below the 50 level, indicating a prevailing bearish bias.
The primary support appears at the nine-day EMA at 7.1781.
The USD/CNH pair halts its four-day winning streak, trading around 7.1690 during the Asian hours on Wednesday. An analysis of the daily chart indicates that the pair moves sideways within a rectangular pattern, which points to a consolidation phase.
However, the 14-day Relative Strength Index (RSI), a key momentum indicator, remains below the 50 level, suggesting a bearish momentum is in play. Additionally, the USD/CNH pair trades below the nine-day Exponential Moving Average (EMA), further suggesting weaker short-term price momentum.
On the downside, the USD/CNH pair hovers around the lower boundary of the rectangle around 168.80. A break below this level could confirm the ongoing bearish bias and put the downward pressure on the pair to retest the seven-month low at 7.1603, which was recorded on June 25.
The nine-day EMA at 7.1781 appears as the initial barrier. A successful breach above this level would improve the short-term price momentum and support the pair to explore the region around the 50-day EMA at 7.2102, followed by the rectangle’s upper boundary around 7.2150. Further resistance appears at the monthly high of 7.2240, reached on June 2.
USD/CNH: Daily Chart
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