USD/CNH Price Analysis: Yuan charts a pennant pattern
|- USD/CNH has created a pennant pattern on the daily chart.
- A breakdown will likely accelerate the sell-off from June highs.
USD/CNH (Yuan's offshore exchange rate) has printed a contracting triangle (lower high + higher low) on the daily chart.
The congestion could be referred to as pennant, as it is preceded by a near-90 degree decline from 7.1961 to 7.0397.
At press time, the lower end of the pennant is located at 7.05, and resistance is located at 7.0862. A close below 7.05 would confirm pennant breakdown, a bearish continuation pattern. That would signal a resumption of the decline from 7.1961 and open the doors for 6.9041 (March 9 low).
Alternatively, a pennant breakout would imply a bearish-to-bullish trend change and shift the focus to 7.1557 (May 4 high). At press time, USD/CNH is trading at 7.0710.
Daily chart
Trend: Neutral
Technical levels
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