- USD/CNH ignores better than forecast inflation data from China.
- 10-day SMA, six-week-old resistance line questions immediate upside.
- Sellers may remain cautious unless witnessing a break of 6.9300.
USD/CNH takes rounds to 6.9725 amid Monday’s initial trading. In doing so, the pair struggles to justify upbeat inflation data from China. The reason could be traced from the fresh Sino-American tension after Trump administration levied fresh sanctions on Chinese apps and Hong Kong Leader.
Read: Chinese CPI higher than expected, 2.7% vs 2.6%
Technically, the pair aims for a 10-day SMA level of 6.9780 as nearby resistance before targeting a falling trend line from June 29, currently around 6.9968.
Although weak RSI conditions defy calls of any further moves past-6.9968, bulls’ attempt will have an additional hurdle in the form of the 7.000 threshold to justify their strength.
On the contrary, 6.9530 and the monthly bottom around 6.9320 may entertain short-term traders during the pair’s fresh downside.
If bears manage to firm the grip below 6.9320, March month’s low near 6.9050 could well return to the charts.
USD/CNH daily chart
Trend: Pullback expected