USD/CNH Technical Analysis: Bounce could be short-lived

Omkar Godbole FXStreet Contributor

The USD/CNH is currently trading at 6.8690 - up 0.27 percent on the day - confirming an upside break of the falling trendline on the hourly chart. The bounce, however, could be short-lived, as the daily chart continues to call a move lower to 6.80.

Hourly chart

As seen above, the falling trendline has been scaled, validating the bullish divergence of the relative strength index (RSI). The key MAs (50, 100 and 200), however, continue to trend lower in favor of the bears. As a result, the path of least resistance remains to the downside.

Daily chart

The symmetrical triangle breakdown confirmed on Monday validated the bearish divergence of the 14-week RSI and opened the doors for 6.80 (23.6% Fib R of March low/November high).
More importantly, the outlook as per the daily chart will remain bearish as long as the pair is trading below the descending 9bearish) 10-day MA, currently at

Trend: Bearish

USD/CNH

Overview:
    Today Last Price: 6.8695
    Today Daily change: 1.9e+2 pips
    Today Daily change %: 0.273%
    Today Daily Open: 6.8508
Trends:
    Previous Daily SMA20: 6.9307
    Previous Daily SMA50: 6.9242
    Previous Daily SMA100: 6.8828
    Previous Daily SMA200: 6.64
Levels:
    Previous Daily High: 6.8828
    Previous Daily Low: 6.826
    Previous Weekly High: 6.9587
    Previous Weekly Low: 6.9306
    Previous Monthly High: 6.9808
    Previous Monthly Low: 6.8525
    Previous Daily Fibonacci 38.2%: 6.8477
    Previous Daily Fibonacci 61.8%: 6.8611
    Previous Daily Pivot Point S1: 6.8236
    Previous Daily Pivot Point S2: 6.7963
    Previous Daily Pivot Point S3: 6.7667
    Previous Daily Pivot Point R1: 6.8804
    Previous Daily Pivot Point R2: 6.91
    Previous Daily Pivot Point R3: 6.9373

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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