USD/CNH Price Analysis: Symmetrical triangle breakout on daily chart

USD/CNH's daily chart shows symmetrical triangle breakout.
The breakout is backed by bullish readings on key indicators.

Omkar Godbole FXStreet Contributor

USD/CNH gained ground on Friday as the escalating US-China tensions over Hong Kong weighed over the offshore Yuan.

The pair closed at 7.1452, confirming an upside break of the daily chart symmetrical triangle represented by trendlines connecting May 4 and May 18 highs and May 8 and May 20 lows.

The triangle breakout has bolstered the bullish view put forward by the falling channel breakout confirmed on May 1 and suggests scope for a test of the 2019 high of 7.1952. The breakout is backed by an above-50 or bullish print on the 14-day relative strength index (RSI).

On the lower side, an acceptance under 7.10 (last week's low + 50-day simple moving average) would shift risk in favor of a drop to the psychological support of 7.00.

At press time, the pair is trading largely unchanged on the day at 7.1522.

Daily chart

Trend: Bullish

Technical levels

1. R3 7.2044
2. R2 7.1844
3. R1 7.1666
PP 7.1466
1. S1 7.1288
2. S2 7.1088
3. S3 7.091

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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