Technical Analysis Summary of AUD/USD and USD/CNH
This summary provides an overview of the technical analysis for the AUD/USD and USD/CNH currency pairs, highlighting key resistance and support levels, as well as momentum indicators that traders should consider in the current market environment.
USD/CNH Technical Analysis
The USD/CNH pair has encountered significant resistance around the highs of 2022 and 2023, leading to an acceleration of bearish momentum. The offshore yuan has appreciated by 1% against the US dollar this week, marking its most volatile week in nearly six months.
Key technical levels to watch include:
- Monthly S1 Pivot: 7.2607
- High-Volume Node (HVN): 7.2472
Recent price action suggests that the USD/CNH is attempting to hold above these critical levels. A Tuesday candle pattern is close to confirming an inverted hammer, and the daily RSI (2) is currently in oversold territory, indicating a potential for a short-term bounce. However, if US-China relations remain positive, traders may look to fade any upward moves towards the 7.3 level and the July high, anticipating further declines.
AUD/USD Technical Analysis
As noted in previous reports, the AUD/USD pair tends to follow the movements of the yuan. The recent bullish trend in AUD/USD aligns with the bearish trend in USD/CNH. The weekly chart indicates that the RSI (14) reached oversold conditions earlier this month, leading to a price reversal from a false break of the 2022 low.
Key technical indicators for AUD/USD include:
- Support Levels: Dips towards the 10/20-day EMAs just above 0.6210 are considered bullish as long as prices remain above the 2022 low.
- Resistance Levels: 0.6348-71 (August low and volume node) is a significant resistance area. A break above this level could target the 0.6500 mark near the HVN of the drop from the September high to January low.
Overall, the technical outlook for AUD/USD remains bullish as long as it holds above critical support levels, while traders should remain cautious of potential volatility stemming from geopolitical developments.
Conclusion
In summary, both AUD/USD and USD/CNH are experiencing notable volatility influenced by external factors, particularly US-China relations. Traders should closely monitor key technical levels and momentum indicators to navigate the current market landscape effectively.