• USD/CNH picks up bids to extend early week rebound from the key Fibonacci retracement level.
• Convergence of 100-DMA, previous support line from October challenges buyers.
• MACD, RSI conditions suggest further hardships for bulls.

USD/CNH prints a two-day uptrend around 6.9870 while extending the week-start rebound from the lowest levels in three months.

That said, the offshore Chinese Yuan (CNH) pair prints mild gains while defending the bounce off the 61.8% Fibonacci retracement level of the August-October upside.

Although the recovery moves from the key Fibonacci retracement level, also known as the golden ratio, teases the USD/CNH bulls, the downbeat RSI (14) and bearish MACD signals challenge the quote’s further upside.

Also raising doubts on the USD/CNH run-up is the joint of the 100-DMA and the support-turned-resistance line from October, near 7.0265-70.

It’s worth noting that the pair’s advances past 7.0270 need validation from the 50% Fibonacci retracement level surrounding 7.0465 before giving control to the buyers.

In that case, a gradual run-up towards the late October swing low near 7.1660 can’t be ruled out.

Alternatively, a daily closing below the 61.8% Fibonacci retracement level of 6.9688 could quickly drag the USD/CNH prices to the latest trough surrounding 6.9300.

Following that, the lows marked during mid-September, close to 6.9100, acts as the last defense of the USD/CNH bulls.

USD/CNH: Daily chart

Trend: Pullback expected