USDCNH had a bearish start on Monday, with the price touching a crucial support at the six-month low of 6.7360. The price dropped beneath the 23.6% Fibonacci retracement level of the upleg from 6.2350 to 6.9781, however, currently, it is paring some of the lost ground.
The RSI is pointing up near oversold levels, slightly above 30, indicating that the market could strengthen a little bit in the short-term until the index falls back below that threshold, while the MACD supports a bearish to neutral picture, since it continues to hold beneath the zero line.
If the market manages to pick up speed, the 23.6% Fibonacci which overlaps with the 20-day simple moving average (SMA) could offer nearby resistance ahead of the 6.8245 barrier, taken from the lows on December 4. A significant close above the latter would meet the 40-day SMA around 6.8464 before running towards 6.9230.
On the other side, should prices drop below the six-month low, they could hit the 38.2% Fibonacci of 6.8942 before the focus shifts towards the support area within 6.5980 – 6.6061, which encapsulates the 50.0% Fibonacci region.
In the short-term, the outlook remains negative since prices hold below all the moving average lines and the bearish cross between the 20- and the 40-day SMAs stays in place.
