USD/CNH Price Analysis: Extends pullback from 6.9540-50 resistance confluence

• USD/CNH remains pressured for third consecutive day despite bouncing off intraday low at the latest.
• RSI retreat backs offshore Chinese Yuan pair’s U-turn from 200-DMA, 38.2% Fibonacci retracement.
• Five-week-old horizontal support restricts immediate downside ahead of the key support line stretched from early February.

USD/CNH bears keep the reins for the third consecutive day on early Friday, down 0.10% intraday near 6.9250 by the press time. In doing so, the offshore Chinese Yuan (CNH) pair ignores the latest rebound from the intraday low while keeping the early-week U-turn from the key upside hurdle.

Not only the failure to cross the 200-DMA and 38.2% Fibonacci retracement level of the USD/CNH pair’s fall from October 2022 to January 2023 but the RSI (14) retreat from overbought territory also suggests a further decline of the quote.

However, a horizontal area comprising multiple levels marked since March 20, between 6.9070 and 6.9130, restricts the immediate downside of the USD/CNH pair.

Following that, an upward-sloping support line from February 02, close to 6.8850, will be in the spotlight. In a case where the USD/CNH price stays weaker past 6.8850, the 100-DMA level of 6.8760 can act as the last defense of the buyers.

Alternatively, recovery moves need to cross the aforementioned 6.9540-50 resistance confluence to convince USD/CNH bulls.

Even so, the four-month-old descending resistance line near 6.9800 can prod the pair buyers before suggesting a clear bullish trend.

USD/CNH: Daily chart

Trend: Limited downside expected