The USD/CNH pair is encountering selling interest around 7.3170 during the early European trading hours on Thursday. However, the potential for further downside may be limited due to expectations of slower US interest rate cuts in 2025 and concerns over potential protectionist policies under incoming President Donald Trump.
Recent data from China’s Caixin Manufacturing Purchasing Managers Index (PMI) revealed weaker-than-expected performance in the country’s manufacturing sector for December, raising concerns about a slowing economic recovery. This development may weigh on the Chinese Yuan (CNH) in the short term.
From a technical perspective, the bullish outlook for USD/CNH remains intact, with the pair holding above the critical 100-period Exponential Moving Average (EMA). The Relative Strength Index (RSI), currently around 59.30, is also supporting upward momentum, suggesting that the path of least resistance is to the upside.
Immediate resistance for the pair is found at the 7.3400-7.3405 zone, where the upper boundary of the Bollinger Band aligns with a psychological level. A decisive break above this resistance could open the way for a move toward the December 31 high of 7.3697.
On the downside, the initial support level stands at 7.2974, the December 30 low. Further declines could see the pair test 7.2745, the low from December 13. The next key downside level to watch is 7.2588, the lower limit of the Bollinger Band.
Related Topics:
- Current USD Exchange Rate: $2,000 in Yen
- Current USD Exchange Rate: How Much Is $1,000 in Tokyo?
- Current USD Exchange Rate: What is $10 in Pounds?
