- USD/CNH’s daily MACD histogram shows downside move is running out of steam.
- The pair may witness an oversold bounce in the short-term.
USD/CNH is trading near 6.9112 at press time, representing marginal losses on the day, having put in a six-month low of 6.8936 on Friday.
The People’s Bank of China raised the daily yuan fix to 6.9194 from 6.9107. So far, however, that has failed to lift USD/CNH (put the offshore yuan under pressure).
The daily chart MACD, an indicator used to gauge trend strength and trend changes, is now producing higher lows – a sign of weakening of the downward momentum. The long wicks attached to Friday’s candle also indicate bearish exhaustion.
As such, a corrective bounce to former support-turned-resistance of 6.9643 (July 22 low) could be seen. Alternatively, an acceptance under Friday’s low of 6.8936 would signal a resumption of the sell-off.
Daily chart
Trend: Corrective bounce likely
Technical levels
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