USD/CNH technical analysis: Drops 0.30% making 6.90 the level to beat for bulls
|- USD/CNH has established a bearish lower high at 6.90.
- A close above 6.90 is needed to revive the bullish setup.
- A break below Wednesday's low would expose key average support.
USD/CNH dropped 0.30% on Wednesday, courtesy of Federal Reserve's Chairman Jerome Powell's dovish testimony and the resulting six basis point drop in the US two-year Treasury yield.
Notably, with the 0.30% drop, the pair has established a bearish lower high at 6.90. As a result, a break above 6.90 is needed to invalidate the bearish lower high and revive the bullish outlook.
A daily close above 6.90 would also confirm an upside break of the trendline connecting June 10 and June 18 highs and open the doors to 6.9394 (June 18 high).
A bullish close could happen this week. After all, the markets are already priced for two Fed rate cuts this year.
As of writing, the USD/CNH pair is trading at 6.8739. Acceptance below Wednesday's low of 6.8694 would validate the bearish lower high and the rejection at the falling trendline and allow a deeper drop to 6.8352 (200-day MA).
Daily chart
Trend: Bullish above 6.90
Pivot points
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