USD/CNH Price Analysis: Pullback remains elusive beyond 6.9450 support confluence

• USD/CNH consolidates the biggest daily gains in a month at one-week high.
• Bearish MACD signals keep sellers hopeful but 200/100 HMAs challenge further downside.
• Bulls need validation from the monthly high, the 7.0000 threshold.

USD/CNH retreats to 6.9700 during Wednesday’s Asian session, after rising the most in a month to refresh the weekly the previous day.

In doing so, the offshore Chinese yuan (CNH) pair justifies the bearish MACD signals, as well as the RSI (14) pullback from the overbought territory.

However, a convergence of the 100-HMA and the 200-HMA around 6.9450 appears a tough nut to crack for the USD/CNH bears.

Should the quote drops below 6.9450, the 78.6% Fibonacci retracement level of the pair’s September 01-07 upside, near 6.9100 can’t be ruled out. However, the monthly low near 6.8870 could challenge the pair sellers afterward.

Alternatively, recovery moves need to cross the latest swing high surrounding 6.9850 to convince intraday buyers.

Following that, the monthly high near 6.9970 and the 7.0000 psychological magnet will be crucial to challenge the USD/CNH bulls.

In a case where the pair remains firmer past 7.0000, the late July 2020 high near 7.0300 will be in focus.

To sum up, USD/CNH is likely to witness further downside but the overall trend remains bullish.

USD/CNH: Hourly chart

Trend: Limited downside expected