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• USD/CNH weakens to around 7.3170 in Thursday’s early European session, down 0.29% on the day.
• The positive view of the pair prevails above the key 100-day EMA with the bullish RSI indicator. 
• The first upside barrier is seen in the 7.3400-7.3405 zone; the initial support level is located at 7.2974. 

The USD/CNH pair attracts some sellers to near 7.3170 during the early European trading hours on Thursday. However, the downside for the pair might be limited amid the prospect of slower US interest rate cuts in 2025 and the potential protectionist policies under incoming President Donald Trump. 

The latest Chinese Caixin Manufacturing Purchasing Managers Index (PMI) showed that the country’s manufacturing sector came in weaker than expected in December. This reading raised concerns over a slowing economic recovery in the world's second-largest economy and might create a headwind for the Chinese Yuan. 

According to the daily chart, the bullish outlook of USD/CNH remains intact, characterised by the price holding above the key 100-period Exponential Moving Average (EMA). The upward momentum is supported by the Relative Strength Index (RSI), which stands above the midline near 59.30, suggesting the path of least resistance is to the upside. 

The confluence of the upper boundary of the Bollinger Band and the psychological level at the 7.3400-7.3405 region acts as an immediate resistance level for the pair. A decisive break above this level could pave the way to 7.3697, the high of December 31. 

On the downside, the initial support level for USD/CNH emerges at 7.2974, the low of December 30. Extended losses could see a drop to 7.2745, the low of December 13. The additional downside filter to watch is 7.2588, the lower limit of the Bollinger Band. 

USD/CNH daily chart
 

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