- USD/CNH’s daily chart shows an impending bear cross of 100- and 200-day averages.
- The path of least resistance is to the lower side.
USD/CNH is currently trading at 6.9652, representing moderate gains on the day, having hit a low of 6.95 earlier today.
The pair held on to that psychological support despite the impending bear cross between the 100- and 200-day moving averages (MAs). The negative cross would be confirmed on Wednesday.
Long-term MA crossovers are lagging indicators and have limited predictive powers at best. That said, the broader setup in USD/CNH is currently bearish. As discussed Monday, the pair is looking south, having faced rejection at the weekly chart bearish channel resistance.
Additionally, the 14-day relative strength index is reporting bearish conditions with a below-50 print.
The impending bear cross, therefore, could bolster the bearish setup and invite stronger selling pressure.
So, the support at 6.95 could give in, yielding a drop to 6.90. On the higher side, a close above the 10-day average at 7.0071 is needed to invalidate the immediate bearish case.
Daily chart
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Trend: Bearish
Technical levels
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