US Dollar Breaks Key Support Against Offshore Chinese Yuan

The USDCNH currency pair has broken below the 7.1713 key support level, suggesting that the recent upside move from the 7.0869 low has likely completed at the 7.2826 high. This technical breakdown opens the door for further losses in the coming days and weeks.

Further Downside Risks Emerge

Following the break of the 7.1713 support, the next key downside targets for the USDCNH are located at 7.1450 and the 7.0869 previous low.If sellers can push the pair below these levels, it would likely signal that the longer-term downtrend from the 7.3676 high has resumed, with the potential for a more substantial decline toward the 6.7000 handle.

Resistance Levels to Watch

In the near-term, the first level of resistance to watch is the 7.2360 area. A break back above this level could potentially trigger a move to retest the 7.2826 high.If the USDCNH can reclaim the 7.2826 barrier, the next key upside target would be the 7.3600 resistance zone.

Downside Momentum Building

However, for now, the technical bias has shifted to a more bearish outlook following the breakdown below the 7.1713 support. The path of least resistance appears to be further losses toward the 7.1450 and 7.0869 targets.Only a move back above the 7.2360 and 7.2826 resistance levels would ease the downside pressure and shift the bias back to a more neutral stance.

Key Levels to Watch

The key levels to watch in the USDCNH are the 7.1450 and 7.0869 downside targets, along with the 7.2360 and 7.2826 resistance barriers.

As long as the pair remains below 7.2360, the overall technical bias will remain bearish, with the potential for a more significant decline toward the 6.7000 area if the 7.0869 low is taken out.

The USDCNH has shifted to a more bearish technical outlook after the recent breakdown below 7.1713 support. Traders will want to closely monitor the price action around the key support and resistance levels highlighted to determine if the downside momentum will continue to build or if a more significant rebound could unfold.