USD/CNH jumps above 200-day MA on weak China data, 14-day RSI diverges

• USD/CNH has moved back above the 200-day MA, possibly on the back of dismal China data and technical conditions. 
• With the positive move seen today, the 14-day RSI has diverged in favor of the bulls.

The USD/CNH pair is currently trading at 6.74, representing a 0.5 percent rise on the day.

The pair picked up a strong bid at 6.7043 earlier today and crossed the 200-day moving average (MA) of 6.7328 after China's January Caixin PMI printed at 48.3 - the lowest level in nearly three years - stoking fears of a deeper slowdown in the world's second-largest economy.

A strong corrective bounce was expected, as the 14-hour relative strength index (RSI) had diverged in favor of the bulls 24-hours ago. That indicator is now biased bullish above 50.00.

More importantly, the 14-day RSI is now showing a bullish divergence. So, it could be argued that the sell-off from the highs above 6.95 has likely found a short-term bottom at 6.7013.

Technical Levels