USD/CNH Price Analysis: Bulls attack yearly high above 6.8200, bumpy road ahead
- USD/CNH refreshes four-month high as it crosses ascending resistance line from late May.
- Yearly peak, January 2020 swing low could challenge bulls as RSI approaches overbought territory.
- Bears remain cautious until witnessing a break of 2.5-month-old support line.
USD/CNH refreshed its five-month high with 6.8292 before retreating to 6.8185 during Friday’s Asian session.
In doing so, the offshore Chinese yuan (CNH) justifies the second break of an upward sloping resistance line from late May but struggles to gain acceptance amid buyer's fears of the bumpy road ahead, especially when the RSI (14) approaches overbought territory.
An area comprising a yearly top surrounding 6.8325-75 appears the first major hurdle for the USD/CNH bulls to tackle to keep control.
Following that, January 2020 low near 6.8455-60 could challenge the upside momentum.
In a case where the USD/CNH prices remain firmer past 6.8460, the 61.8% Fibonacci Expansion (FE) of April-June moves, near 6.9210, will be in focus.
Alternatively, pullback moves may retest the resistance-turned-support, close to 6.8000 by the press time.
However, the USD/CNH pair’s downside remains elusive until the quote stays beyond an ascending support line from early June, close to 6.7300 at the latest.
USD/CNH: Daily chart
Trend: Limited upside expected