USDCNH, Bullish over the last month
The USDCNH pair has strengthened dramatically over the past month when it was trading around 6.4000. This has caused concerns in China and forced the PBOC to intervene to stem the decline in the currency. The Bank weakened the yuan by the most in a year in the hope that a devaluation would take the sting out of the US trade tariffs. The overnight high for the pair reached 6.8379 and price has now slipped back to 6.7965 after dropping to test support at 6.7800. A move higher would push price to 6.85000 followed by 6.9000 where further intervention is expected. Above this level 6.9500 comes into play followed by the 7.0000 level which remains a target in the longer term.
The rising green trend line is coming into play at 6.7800 and a break under this area could see the move higher unwind towards initial support around 6.7600 followed by 6.7400 and the area around 6.7319. Any drop under this level could find support in one of two pockets at 6.6850 or 6.6660. Should price retrace further the 6.6000 area comes into play with the 6.5984 level of particular interest.
EURUSD, Bearish continuation developing on weekly timeframe
The EURUSD pair is presenting an interesting picture on the weekly chart with analysts paying close attention to the moves over the coming weeks. The price has entered a phase of consolidation around the 1.1700/1.1600 area with a resistance level of 1.18500 and a support area at 1.15000. This support has been tested twice now to form a double bottom at 1.15100. A break above 1.18500 would trigger a trade to reach for 1.22000 as a target which has been used as support during a previous consolidation earlier this year.
There is a chance that after this move takes place a drop back to the current range could trigger a head and shoulders break down under 1.14500 to target 1.04000 but this is far in the future. For now support remains at 1.13125 with trend line support at 1.15000.