Talking Points:
- USD/CNH failed to break above the 6.7 resistance, fell below support at 6.6860
- The pair found a bid from short term support at 6.6700
- Bullish conviction at this stage might require a break above 6.7
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The US Dollar is trading higher versus the Chinese Yuan in offshore trade, after the pair found support around the last short term swing high and formed a “bullish engulfing bar”.
The pair had difficulties cracking the 6.7 level and the US ISM Services numbers provided a catalyst for a break of the short term support at 6.6860.
But the pair did catch a bid around the last short term swing high (~6.6700) while forming a “bullish engulfing bar”, implying another attempt at the key 6.7000 handle.
At the very near term, the pair faces a potential hurdle at 6.6860, but real bullish conviction might require a break and a hold above 6.7.
A failure to push higher seems likely to see 6.6700 cleared as focus may shift to 6.6500 as a major line of defense, followed by July lows at 6.6224.
USD/CNH Daily Chart: September 9, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail oshimoni@dailyfx.com
Follow him on Twitter at @OdedShimoni
