USD/CNH Price Analysis: Stays firmer inside immediate rectangle despite upbeat China GDP
- USD/CNH snaps two-day losing streak even as China’s Q3 GDP improved.
- Short-term rectangle signals limited upside moves but sustained trading beyond 200-HMA favor buyers.
- Fortnight-old ascending trend line, bullish MACD signals also strengthen upside bias.
USD/CNH remains firmer around 7.2700 as bulls retake control during early Monday, after a two-day absence. In doing so, the offshore Chinese yuan (CNH) ignores recently firmer China data while staying inside a three-day-old rectangle formation.
That said, China’s Q3 GDP rose to 3.9% YoY versus 3.4% expected while September’s Industrial Output also increased by 6.3% in a year compared to 4.5% market forecasts. However, China Retail Sales eased to 2.5% YoY from 3.3% market expectations during September.
Also read: China GDP (YoY) Q3: 3.9% (exp 3.3% vs. prev 0.4%), Aussie remains volatile
Although the stated triangle’s upper line, around 7.2800 at the latest, challenges the USD/CNH bulls, the pair’s sustained trading beyond the two-week-old ascending trend line and the 200-SMA, respectively near 7.2180 and 7.2250, keep buyers hopeful. Also favoring the upside hopes are the bullish MACD signals.
However, the monthly high near 7.2840 and the 7.3000 psychological magnet may challenge the USD/CNH buyers going forward.
On the flip side, a clear break of the 200-SMA level surrounding 7.2180 could quickly direct the quote to the 50% and 61.8% Fibonacci retracement level of October 05-21 upside, near 7.1480 and 7.1160 in that order.
USD/CNH: Hourly chart
Trend: Further upside expected