Comprehensive USD/CNH Analysis for September 22, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USD/CNH for 22nd September 2023.

Key Takeaways

The Federal Reserve’s Decision: In September, the Federal Reserve made a pivotal decision to halt interest rate hikes. The dot plot hints at the possibility of future rate increases.

Furthermore, the overall monetary policy for the upcoming year leans towards a more hawkish stance, with a shift from an anticipated 5 interest rate cuts to just 2.

These factors collectively maintain the US dollar’s dominance, momentarily placing non-US currencies at a disadvantage.

USD/CNH Technical Analysis

USD/CNH Daily Chart Signals

(Daily chart of USD/CNH, source: Ultima Markets MT4) 

Rebound and Candle Pattern: Our analysis of the daily chart reveals an interesting rebound in the USD/CNH pair after reaching the 33-day moving average.

This rebound pattern closely resembles a head and shoulders candle formation. This chart development signifies a potential right shoulder formation.

USD/CNH 4-Hour Chart Dynamics

(4-hour chart of USD/CNH, source: Ultima Markets MT4) 

Rebound Magnitude: Transitioning to the 4-hour chart, we observe that the recent rebound of USD/CNH has reached a significant level, approximately 1.618 times the rebound height recorded on September 14.

It is vital to keep a close watch on market movement below the 65-period moving average to gain insights into the conclusion of the market rebound.

Insights from the 1-Hour Chart

（1-hour chart of USD/CNH, source: Ultima Markets MT4) 

Equilibrium in the Market: On the 1-hour chart, the moving average remains a pivotal support for the market.

The stochastic oscillator hovers around the middle area at 50, indicating an equilibrium between bullish and bearish sentiments.

To confirm the initiation of short positions, a market movement below the moving average group is crucial.

Ultima Markets Pivot Indicator

(1-hour chart of USD/CNH, source: Ultima Markets MT4) 

Key Price Level: According to the pivot indicator in Ultima Markets MT4, the central price for the day stands at 7.31286.

A bullish sentiment prevails above this level, with the first target at 7.32288 and the second target at 7.33139.

Conversely, a bearish stance is favored below 7.31286, with the first target at 7.30435 and the second target at 7.29450.

Conclusion