Refreshes daily top near 7.1885-90, seems poised to climb further

• USD/CNH reverses an Asian session dip and stalls the previous day’s pullback from a multi-day top.
• The technical setup favours bullish traders and supports prospects for a further appreciating move.
• Acceptance below the 7.1870-7.1865 confluence is needed to negate the near-term positive bias.

The USD/CNH pair attracts some dip-buying near the 7.1810-7.1805 area during the Asian session on Tuesday and climbs to a fresh daily peak in the last hour. Spot prices currently trade with a mild positive bias, around the 7.1885-7.1890 region, though remain below a multi-day top touched on Monday.

From a technical perspective, the USD/CNH pair showed resilience below the 7.1870-7.1865 confluence and for now, seems to have stalled the overnight pullback from the 61.8% Fibonacci retracement level of the downfall from a two-month top touched on January 17. The said area comprises the 50% Fibo. level, the 50- and the 100-period Simple Moving Averages (SMAs) on the 4-hour chart, which should now act as a key pivotal point.

Some follow-through selling, leading to a subsequent slide below the 7.1810-7.1805 zone, or the Asian session low, will be seen as a key trigger for intraday bears and drag the USD/CNH pair to the 38.2% Fibo. level, around the 7.1765 region. A convincing break below the latter might expose the next relevant support near the 7.1640-7.1635 area or the 23.6% Fibo. level.

Meanwhile, oscillators on the daily chart have just started gaining positive traction and support prospects for additional gains. That said, any subsequent move-up is likely to confront resistance near the 7.1930 area. This is followed by the 61.8% Fibo. level, around the 7.1970-7.1975 region, which if cleared decisively should pave the way for a move beyond the 7.2000 mark, towards the next relevant hurdle near the 7.2020-7.2030 zone.

USD/CNH 4-hour chart

Technical levels to watch