USD/CNH Technical Analysis: Head-and-shoulders breakdown confirms bear reversal
|- The head-and-shoulders breakdown, as seen on the 4-hour and daily chart, indicates a bullish-to-bearish trend change, that is, the rally from the June low of 6.3828 has ended and the bears have regained control.
- More importantly, it has opened the doors to 6.6840 (target as per the measured height method).
- The oversold conditions indicated by the 14-hour relative strength index (RSI) could yield a re-test of the neckline resistance (former support) of 6.8212 before further downside unfolds. Only, back-to-back daily closes above 6.8212 would invalidate the bearish pattern.
4-hour chart
Spot Rate: 6.7930
Daily High: 6.8039
Daily Low: 6.7810
Trend: Bearish
R1: 6.8056 (Aug. 8 low)
R2: 6.821 (neckline resistance)
R3: 6.8316 (5-day moving average)
Support
S1: 6.7877 (23.6% Fib R of 6.2353/6.9584)
S2: 6.7439 (ascending 50-day moving average)
S3: 6.7380(July 26 low)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.