The USD/CNY currency pair appears to have bounced back following last week’s plunge. The pair extended this week’s gains towards 6.4300 following the latest round of data. It has now surged to trade between the 23.60% and 38.20% fib levels in the 60-min chart.

The currency pair remains several levels below the 100-hour and the 200-hour SMA lines. The recent rebound has pushed the pair closer to the overbought levels of the 14-hour RSI. This could trigger a short-term pullback.

USD/CNY Fundamentals Overview

From a fundamental perspective, the USD/CNY currency pair is trading at the back of a relatively busy period in both markets. Last week, the US ISM Manufacturing and Services PMIs missed expectations. The ADP employment change for April also came short of expectations while initial jobless claims came in better than expected. On Tuesday, the US JOLTs job openings for March beat the expectation of 7.5 million with a count of 8.123 million. The US Redbook Index for the week ended May 7 posted a (YoY) change of 13.3% compared to the previous period’s equivalent of 14.2%. On the other hand, the NFIB business optimism index for April improved to 99.8 up from 98.2 in the previous reading.

In China, the consumer price index for April missed the expected (YoY) change of 1% with a change of 0.9%. The (MoM) equivalent also missed -0.2% with a change of -0.3%. On the other hand, the Chinese producer price index for the period outshone the expectation of 6.6% with a (YoY) change of 6.8%.

USD/CNY Technical Analysis (the 60-min Chart)

Technically, the USD/CNY currency pair appears to be recovering from a sharp plunge experienced last week. The pair has now surged to trade between the 23.60% and 38.20% fib levels in the 60-min chart. It has also surged closer to overbought levels of the 14-hour RSI.

The bulls will be looking to extend the current recovery towards 50% and 61.80% fib levels at 6.4447  and 6.4541, respectively. On the other hand, the bears will target pullbacks at 6.4188 or lower at the 0.00% fib level at 6.4075.

USD/CNY Technical Analysis (the Daily Chart)

In the daily chart, the USD/CNY currency pair appears to have recently pulled back after breaking out of a descending channel formation. This indicates an attempt by the bears to retake control of the pair. It has now plunged to oversold levels of the 14-day RSI.

The bears will be looking to extend the current declines towards 6.3576 or lower to 6.2728. On the other hand, the bulls will target potential rebounds at around 6.5061 or higher at 6.5827.