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USD/CNH technical analysis: At 5.5-week low, key indicator bearish for first since April 19

2019-06-20 09:15

  • USD/CNH has dropped to the lowest since May 13.

  • The RSI is biased bearish for the first time in two months.

  • USD/CNH risks falling to support at 6.8527.



The USD/CNH pair is currently trading at 6.8867 – the lowest level since May 13 – and could drop even further as the widely followed relative strength index (RSI) has turned bearish for the first time in two months.



The 14-day RSI has found acceptance below 50 and is currently seen at 44.50, the lowest level since April 19. A reading below 50 indicates the market is bearish.



Further, the 5- and 10-day moving averages (MAs) are trending south, validating the channel breakdown confirmed on June 18. The pair also violated the support at 6.8970 with a close at 6.8932 on Wednesday.



As a result, a deeper drop to 6.8527 looks likely. That level is the 38.2% Fibonacci retracement of the rally from April lows to June 7 highs.



Daily chart





Trend: Bearish



Technical Levels





 


This article is published only for general use basic informatory purposes and should not be considered or depended on as a financial or investment advice. Investors should make sure that they understand the risks and seek independent financial advice at all times. CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE.

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