The US Dollar/Chinese Yuan exchange rate is experiencing a decline after briefly rebounding from a support line that has been rising for the past month. This is happening as investors prepare for the release of US Purchasing Managers’ Index (PMI) data. According to the viewpoint of @nehcap, a pullback in the exchange rate is anticipated.

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• USD/CNH fades bounce off one-month-old rising support line as markets brace for US PMI.

The pair currently trades last at 7.29753.

The previous day high was 7.317 while the previous day low was 7.2692. The daily 38.2% Fib levels comes at 7.2987, expected to provide resistance. Similarly, the daily 61.8% fib level is at 7.2875, expected to provide support.

USD/CNH holds lower grounds near 7.2970 as it pokes a one-month-old support line early Wednesday. In doing so, the offshore Chinese Yuan (CNH) pair reverses the previous day’s corrective bounce amid the market’s consolidation for today’s US PMIs, backed by China-induced cautious optimism.

Also read: S&P500 Futures recover, yields extend pullback from multi-year high as traders brace for PMI amid China hopes

However, the nearly oversold RSI and an impending bear cross on the MACD indicator suggest a pullback in the USD/CNH prices, which in turn allows the pair to break the immediate support line surrounding 7.2850.

Following that, the 50-DMA support 7.2170 acts as the final defense of the USD/CNH buyers before directing the quote towards the 61.8% Fibonacci retracement of October 2022 to January 2023 downside, near 7.1170.

On the other hand, firmer prints of the US PMIs and a blow to the recent recovery in the sentiment may propel the USD/CNH prices, which in turn could resume the pair’s upside towards an ascending resistance line from late December 2022, close to 7.3520 at the latest.

In a case where the USD/CNH traders ignore overbought RSI and the MACD conditions, the Yuan pair will aim for the 15-year high marked in October 2022 around 7.3415.

Trend: Pullback expected

Technical Levels: Supports and Resistances

USDCNH currently trading at 7.2952 at the time of writing. Pair opened at 7.3066 and is trading with a change of -0.16% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 7.2349, 50 SMA 7.2147, 100 SMA @ 7.1014 and 200 SMA @ 7.0061.

The previous day high was 7.317 while the previous day low was 7.2692. The daily 38.2% Fib levels comes at 7.2987, expected to provide resistance. Similarly, the daily 61.8% fib level is at 7.2875, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 7.2782, 7.2499, 7.2305
• Pivot resistance is noted at 7.3259, 7.3453, 7.3736

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