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  • USD/CNH is trapped between 100- and 200-day moving averages. 
  • A close above the 100-day MA would signal a continuation of the recent rally.

USD/CNH has been contained to narrow range defined by key averages since Monday. 

While the upside has been capped by the 100-day moving average (MA), the sellers have had a hard time forcing a break below the 200-day MA.

The 100- and 200-day MAs are currently located at 7.0234 and 6.9849, respectively. 

A break above the 100-day MA would signal a continuation of the rally from recent lows near 6.8450 and open the doors to 7.0865 (Dec. 3 high). That looks likely with the 14-day relative strength index reporting bullish conditions with an above-50 print.

On the other hand, a move below the 200-day MA would validate the bearish crossover (a death cross) of the 50- and 200-day MAs and shift risk in favor of a re-test of recent lows. 

At press time, the pair is trading near 7.00, having found bids close to the 200-day MA in early Asia. 

Daily chart

Trend: Neutral

Technical levels