USD/CNH Price Analysis: Stays inside six-week-old bullish channel above 7.0000

• USD/CNH takes the bids to refresh intraday high, snaps two-day downtrend.
• Sustained bounce off 5-DMA, bullish chart pattern keeps buyers hopeful.
• Overbought RSI, early 2020 swing lows challenge immediate upside.

USD/CNH renews intraday high near 7.0190 during the early Tuesday morning in Europe. In doing so, the offshore Chinese yuan (CNH) pair bears the burden of the People’s Bank of China’s (PBOC) inaction while staying inside a six-week-old bullish trend channel.

That said, the PBOC keeps the one-year and five-year Loan Prime Rate (LPR) unchanged at 3.65% and 4.30% respectively.

In addition to the PBOC moves, the pair’s rebound from the 5-DMA also keeps the USD/CNH buyers hopeful unless the quote stays beyond the 7.0015 level.

However, the overbought RSI conditions, as well as the aforementioned channel’s resistance line near 7.0625, challenge the quote’s upside past 7.0015.

It should be noted that the lows marked during April and June of 2020, around 7.0360 and 7.0400 in that order, could restrict the USD/CNH upside afterward.

Meanwhile, a downside break of the 7.0015 mark will need validation from the 7.0000 psychological magnet.

Also likely to challenge the USD/CNH bears will be the stated channel’s lower line and the 21-DMA, respectively around 6.9500 and 6.9400 in that order.

USD/CNH: Daily chart

Trend: Limited upside expected