The Renminbi’s recent push up from 6.8440 has returned the pair to levels seen at the end of last year. Buyers are attempting to breach an important region from 6.9790 to 6.9865 on the daily timeframe, where a bearish crossover of the 200-day simple moving average (SMA) by the 50-day one currently resides.
The short-term oscillators suggest positive momentum is strengthening, backing the improving picture in the price action. The MACD is strengthening above its red trigger line in the negative zone, while the RSI is rising in bullish territory. Nevertheless, the downward sloping 50- and 100-day SMAs imply that the pair may realign with the medium-term negative outlook, if the stretch up fails to overcome the 7.0115 swing high.
To the upside, immediate resistance comes from the 6.9865 level and nearby lower band of the Ichimoku cloud. Pushing up, the swing high of 7.0115 and 100-day SMA at 7.0255 above, could hinder the pair testing the 7.0400 handle. If buying interest persists, a rally could stretch to the 7.0853 and 7.1110 obstacles.
Otherwise, if sellers resurface and restart the move down, the Ichimoku lines may be the first to apply some friction ahead of the support of 6.9035. Diving below, the 6.8650 barrier and 6.8440 recent trough may challenge the bears’ attempts for further declines.
Summarizing, despite the recent appreciation in price in the short-term, the medium-term bearish bias looks to dominate if the Chinese yuan fails to break above the 7.0115 mark.