• USD/CNH steps back from 50-DMA, seven-week-old resistance line.
• Sustained break of previous resistance line from September, bullish MACD favor buyers.
• 23.6% Fibonacci retracement level adds to downside filters, late October’s top also challenge buyers.

USD/CNH struggles to justify the People’s Bank of China’s (PBOC) surprise rate cut during early Monday morning in Europe.

Although the offshore Chinese currency (CNH) pair snaps a three-day uptrend to ease from a monthly high, it does keep Friday’s break of a descending trend line from September 21 to underpin bullish bias. Also favoring the USD/CNH bulls are the upbeat MACD signals and the risk-off mood, not to forget covid and financial risks for China.

That said, the 50-DMA and a seven-week-old resistance line challenge short-term buyers around $6.3900 and $6.3920 respectively.

Even if the quote rises past $6.3920, the October 29 peak of $6.4104 will act as an extra hurdle to the north before directing USD/CNH buyers to 61.8% Fibonacci retracement (Fibo.) of September-December downside, near $6.4285.

Meanwhile, pullback moves remain elusive until staying beyond the resistance-turned-support line from September, around $6.3850.

Also challenging the USD/CNH bears is the 23.6% Fibo. level near $6.3675 and November’s low surrounding $6.3615.

USD/CNH: Daily chart

Trend: Further upside expected