USD/CNH: Potential Bullish Reversal
Fawad Razaqzada March 27, 2019 2:26 PM
The USD/CNH is bouncing back from its own key support area around 6.6750, an area which had been significant resistance in the past.
Last week, we wrote about the Indian Rupee which had created a potential topping pattern as the USD/INR dropped to test a key technical support area. While the USD/INR hasn’t been in a rush to bounce away from this area, the bulls are still defending their ground here nonetheless. So, we could still see a potential rally in the USD/INR. In fact, this emerging market currency pair is not the only one which is displaying a potential reversal pattern. The more closely-followed USD/CNH is also bouncing back from its own key support area around 6.6750, an area which had been significant resistance in the past. So, there is a potential we could see renewed selling in the Chinese yuan as well as the Indian rupee. If so, this could re-ignite EM currency crisis fears, potentially leading to a wider market sell-off, especially given ongoing recession concerns with investors rushing into the safety of government debt. As far the USD/CNH is concerned, a clean break above the old high near 6.7350 could potentially trigger technical buying and lead to a rally.
Source: TradingView and FOREX.com.
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