- USD/CNH has dropped below 23.6 percent Fibonacci retracement of June 14-July 3 rally.
- PBOC tried to soothe markets on Tuesday.
- Tuesday’s intervention by state-owned banks is likely offering support to Chinese currency.
Currently, the offshore Yuan exchange rate or the USD/CNH pair is trading at 6.6402, having clocked a high of 6.6720 and low of 6.6280 earlier today.
The pair has found acceptance below the 100-hour moving average (MA) and could extend the decline further as the 14-day relative strength index (RSI) is still flashing overbought conditions.
The CNH picked up a bid on Tuesday after the People’s Bank of China governor assured markets the central bank would keep the currency stable.
Further, Chinese state-owned banks reportedly intervened in the FX markets on Tuesday and the news is still doing the rounds, likely helping CNH regain some poise.
USD/CNH Technical Levels
Resistance: 6.6509 (100-week MA), 6.6720 (daily high), 6.7329 (previous day’s high).
Support: 6.6280 (daily low), 6.5999 (rising 10-day MA), 6.5578 (50 percent Fibonacci retracement of June 14-July 3 rally).
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