USD/CNH has bounced back after holding its position above the 200-day moving average at 7.22. The daily MACD has entered a positive zone, indicating renewed upward momentum.
The currency pair is nearing the upper limit of the trading range established since 2022 at 7.37, which serves as a key resistance. If USD/CNH moves past 7.37, further upward movement could develop with projections at 7.41 and 7.46/7.47. Initial support can be found at 7.3050, corresponding to the 38.2% retracement level from March.
Technical Signals And Market Sentiment
The pair’s ability to remain anchored above the 200-day average at 7.22 highlights the broader appetite to hold long positions—particularly in anticipation of policy divergence or macro pressures that have yet to play out fully. When the MACD turns positive like this on a daily timeframe, it’s less about short-term fluctuations and more a suggestion that recent downward momentum has stalled with a possible shift in sentiment underway. It’s the kind of technical signal that often precedes buying acceleration or tightening of short-covering zones.
That upper boundary at 7.37—tested but never conclusively breached since 2022—has become more than just a resistance level. It’s a ceiling defined as much by positioning and hedging decisions as by fundamentals. If that level gives way, we’re likely to see something more than just a mechanical move. The 7.41 level isn’t just next in line, it’s the last relatively uncluttered level before the pair starts interacting with old highs near 7.46/7.47. That said, these projections only matter if market participants are prepared to chase the follow-through, and so far, flows have been cautious.
Future Volatility And Strategic Positioning
Support currently sits around 7.3050, not simply because of Fibonacci maths, but because that level aligns with a clustering of minor swing-lows from earlier in the quarter. If price action dips back into that zone, we’ll be watching for signs of conviction—either a steady build of bids, or the absence thereof—which could imply a broader reassessment of risk.
As volatility remains compressed, directional conviction is more likely to come from external shifts rather than an internal breakout from the current range. For now, tactical trades demand sensitivity to breakout levels above and retracement zones below. Price confirms strength, but only sustained closes above resistance suggest continuation, not just testing.
