USD/CNH Price Analysis: Renews day low at 6.8900 on solid Caixin Services PMI

• USD/CNH has refreshed its day low near 6.8900 as Caixin Services PMI performed better than anticipations.
• The US Dollar Index (DXY) is struggling to sustain above the immediate support of 104.80.
• A bear cross, represented by the 20-and 50-period EMAs at 6.9144, adds to the downside filters.

The USD/CNH pair has sensed immense selling pressure and has refreshed its day low at 6.8900 in the Asian session. The Chinese Yuan has been strengthened after the release of the solid Caixin Services PMI data. The economic data has landed at 55.0, higher than the consensus of 50.5 and the former release of 52.9.

Solid Services PMI figures after strong Manufacturing PMI released on Wednesday indicating an all-round recovery in the Chinese economy after dismantling pandemic controls. The US Dollar Index (DXY) is struggling to sustain above the immediate support of 104.80. S&P500 futures are continuously adding losses, fading the impact of Thursday’s recovery and portraying a sheer drop in investors’ risk appetite.

USD/CNH sensed selling pressure after failing to sustain above the 50% Fibonacci retracement (plotted from February 27 high around 6.9900 to March 01 low at 6.8634) at 6.9260. The asset is declining toward the horizontal support placed from February 20 low around 6.8545.

A bear cross, represented by the 20-and 50-period EMAs at 6.9144, adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of drifting below 40.00. A slippage below the same will trigger the downside momentum.

Going forward, a slippage below the intraday low at 6.8900 will drag the asset toward the horizontal support placed from February 20 low around 6.8545 followed by February 14 low at 6.8056.

Alternatively, an upside move above the 61.8% Fibo retracement around 6.9400 will drive the asset toward February 27 high around 6.9900. A breach of the latter will expose the asset to psychological resistance at 7.0000.

USD/CNH hourly chart