Talking Points:
- USD/CNH above the 6.7 handle after finding short term support at around 6.6860
- A hold above 6.7 might put the focus on the January highs
- A move lower could see potential support at 6.6500
Learn good trading habits with the “Traits of successful traders” series
The US Dollar is trading higher versus the Chinese Yuan in offshore trade as the pair broke above the 6.7 handle after finding support around the 6.6860 level.
As we mentioned in the prior report, the pair seemed to have found a short term support around the June 28 close at about 6.6860, which signaled possibility for either another attempt for a break above 6.7 or a deeper corrective move lower on a break below.
The pair blasted through the 6.6 handle and the 6.6500 resistance following the “Brexit” vote, but has since failed to see continued upside momentum above the 6.7 handle resistance.
Conviction above the 6.7000 level might put the focus on potential resistance at the January high around 6.7584, as the pair appears to be carving out a “higher low”.
If price fails to hold above 6.7 and 6.6860, eyes may be set for the 6.6500 level which could potentially act as support again.
USD/CNH Daily Chart: July 18, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
