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USDCNH Rebounded Away From Channel Support

Currencies / Forex Trading Jun 16, 2017 - 03:32 PM GMT

By: Franco_Shao

Currencies

After breaking above the bearish trend line from 6.8876 to 6.8351 on its 4-hour chart, the USDCNH pair continued to break above the major resistance at the June 2 high of 6.7918, and is now trades in 6.8200 area, indicating that the bearish movement from the May 9 high of 6.9171 had completed at 6.7210 already.


USDCNH 4-hour Chart

On the upside

Let’s look into a big picture. USDCNH recently rebounded away from the bottom support trend line of the price channel on its weekly chart, suggesting that the consolidation pullback from the January 3 high of 6.9867 is complete.

USDCNH Weekly Chart

The pair is expected to test the next key resistance of the March 15 low of 6.8450 in the coming days, a break through this level will confirm that the long term bullish movement from the January 2014 low of 6.0152 has resumed, this could trigger another strong move towards the psychologically important 7.0000 level. Near term support is at the ascending trend line from 6.7210 to 6.7707 now at around 6.7770 on its 4-hour chart, followed by 6.7707, as long as these levels hold, the uptrend will continue.

USDCNH Daily Chart

On the downside

However, as long as the pair is below 6.8450 resistance, the rise from 6.7210 would possibly be correction of the downtrend from the May 9 high, and another fall towards 6.6500 is still possible after the correction.

Technical levels

Support levels: 6.7770 (the ascending trend line on 4-hour chart), 6.7707 (June 14 low), 6.7210 (June 1 low).

Resistance levels: 6.8450 (the March 15 low), 6.9170 (the top of the triangle pattern on daily chart), 6.9867 (the January 3 high).

This article is written by Franco Shao, a senior analyst at ForexCycle.

© 2017 Copyright Franco Shao - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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