USDCNY Bullish momentum may Retrace before pushing Higher in the upcoming days. USDCNY currently pushing lower after Monday market open with a gap. Let’s check USDCNY Technical Analysis for more levels and insights.
February 24, 2020, | AtoZMarkets – USDCNY (USDCHN) rejected 7.0560 resistance and may retrace towards 7.01 area. If price able to retrace down towards 7.01 area. Bullish pressure may continue further with the target of 7.08 area. Coronavirus issue led the Chinese economy under pressure; as a result, USDCNY (USDCHN) is currently sustaining Bullish pressure.
Chinese Yuan exchange rate is state-controlled, and the POBC allows Yaun to fluctuate by 2% from the central parity rate each trading days. On the other hand, China Coronavirus crisis impact has put the entire Asian economy under pressure. The Japanese Yen act as a safe-haven asset in the time of Coronavirus crisis previously. However, currently, investors prefer USD and U.S. assets as safe-haven assets.
Chinese Yuan has been struggling to gain momentum against the United States Dollar due to the Coronavirus issue. As the Coronavirus continuously impacting the Global economy, Chinese Yuan failed to sustain its momentum. However, the Yuan has eased by 0.6% against the U.S. Dollar so far this year. Experts believed that Chinese Yuan might face more pressure depending on the Coronavirus expansion.
Moreover, China manufacturing industries are currently locked down, which makes the growth very uncertain and impacting the Global economy severely. As per the current situation, the Yuan may lead to further weakness against other currencies, mainly the USD.
USDCNY (USDCHN) Bullish Trend may Continue After Retracement
As per current price action, USDCNY (USDCHN) may push lower towards 7.01 area. If price able to push lower towards support area 7.01, USDCNY (USDCHN) Bullish momentum may continue towards 7.080 area. The dynamic level of 20 EMA is residing near the price, if USDCNY (USDCHN) break below the dynamic level price may reach towards 7.01 area.
image: USDCNY 4 Hour Chart
According to the 4-hour chart, price is currently residing near 7.03 area. After Monday open with the gap, USDCNY (USDCHN) able to push the price lower to fill the gap. The USDCNY expected to push lower towards 7.01 support area before USDCNY (USDCHN) Bullish momentum continues.
Moreover, the MACD lines create a Bearish crossover, and the histogram volumes are slopping down as confluence. Additionally, the Kijun line and the Tenkan line also residing near the current price, which is indecisive.
USDCNY (USDCHN) may Push Lower Towards $7.01
According to the Daily chart, USDCNY (USDCHN) currently pushing lower may reach 7.01 support area. Last week, there was a Bearish close below 7.05 which was sustained by the Monday open Gap. Bearish pressure may continue toward 7.01 support area before pushing the price higher in the upcoming days.
image: USDCNY Daily Chart
Moreover, the dynamic level of 20 EMA is residing below 7.01 area, which may work as Mean Reversion. The Kijun line and the Tenkan also may function as confluence along with dynamic level of 20 EMA. Additionally, the histogram volumes are also slopping down, which is a good indication of Bearish pressure with an emerging Bearish Divergence.
To conclude, USDCNY may push lower towards 7.01 area on the upcoming events. If the price able to reach 7.01 support, Bullish pressure may continue further.