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.

Omkar Godbole FXStreet Contributor

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

USD/CNH

Overview
Today last price	7.0692
Today Daily Change	0.0014
Today Daily Change %	0.02
Today daily open	7.0678

Trends
Daily SMA20	7.0753
Daily SMA50	7.1011
Daily SMA100	7.0726
Daily SMA200	7.0437

Levels
Previous Daily High	7.0764
Previous Daily Low	7.0584
Previous Weekly High	7.0898
Previous Weekly Low	7.0454
Previous Monthly High	7.1518
Previous Monthly Low	7.04
Daily Fibonacci 38.2%	7.0653
Daily Fibonacci 61.8%	7.0696
Daily Pivot Point S1	7.0587
Daily Pivot Point S2	7.0496
Daily Pivot Point S3	7.0407
Daily Pivot Point R1	7.0767
Daily Pivot Point R2	7.0856
Daily Pivot Point R3	7.0947

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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