Talking Points:
- USD/CNH appears to test the 6.6000 resistance level
- The pair has failed to close above the level for two consecutive days since February
- A clear move above 6.6000 and a hold may put the focus on the 6.6500 level
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The US Dollar is trading sideways versus the Chinese Yuan in offshore trade (at the time this report was written), as price appears to pivot around resistance at 6.6000.
After finding support at 6.5500 the pair moved higher to test the 6.6000 handle, but has yet to manage a clear break and a hold above on a daily close basis. In fact, the pair has failed to hold above the level for two consecutive days since February.
The pair continues to test higher as the price pivots around the 6.6000 level while appearing to find short term support at 6.5880, in turn creating a situation in which the price trades in what looks like an undecided narrow range for the last couple of days.
If price is able to break above 6.6000 and hold the level, it might initially expose possible resistance at the February 3 high around 6.6500.
A break below 6.5880 may put the focus again on the 6.5500 prior support level.
A break below that level could put the spotlight on a major support confluence zone (marked blue) that combines the 6.5000 handle, 200 day SMA, trend line from October 2015, and the 6.47446 level, which is the 0.382 Fib from the long term up trend as marked from the 2014 low at 6.0150.
USD/CNH Daily Chart: June 17, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail instructor@dailyfx.com
