USD/CNH Price Analysis: Stays on the way to 50-DMA despite upbeat China PMI

• USD/CNH recovers from intraday low, stays positive for second consecutive day.
• China’s official PMI data arrived better than expected in December.
• Sustained break of 21-DMA, firmer oscillators favor bulls.
• The previous resistance line from September becomes critical support.

USD/CNH picks up bids to extend the previous day’s rebound, bouncing off intraday low to $6.3775 during early Friday in Asia.

In doing so, the offshore Chinese currency (CNH) pair fails to cheer upbeat official PMI data for December. That said, China’s NBS Manufacturing Purchasing Managers' Index (PMI) grew past the 50.1 forecast and prior release to 50.3 while the Non-Manufacturing PMI rose to 52.7 versus 52.3 previous readouts but eased below 53.1 market consensus.

Technically, the pair’s sustained bounce off 21-DMA joins firmer RSI and bullish MACD signals to direct USD/CNH buyers towards the 50-DMA, around $6.3825 at the latest.

However, the monthly top around $6.3940 and the $6.4000 threshold will challenge the pair’s further upside.

Meanwhile, pullback moves remain elusive until staying beyond the 21-DMA level of $6.3743, a break of which will direct the quote towards the weekly low of $6.3660.

It should be noted, though, that a three-month-old resistance-turned-support line near $6.3500, becomes crucial support to watch for the USD/CNH traders.

USD/CNH: Daily chart

Trend: Further upside expected