USD/CNH Technical Analysis: Chipping away at key ascending trendline support

The USD/CNH pair is feeling the pull of gravity as Shanghai Composite is gaining altitude, possibly due to assurances from regulators.
The currency pair is currently trading around the key rising trendline seen in the hourly chart and could suffer a deeper pullback to the 200-hour exponential moving average (EMA) of 6.9201 below the diagonal support line.
The RSI on the hourly chart has dipped below 50.00 in bearish territory and the MAC is signaling that the bearish move is gathering pace. As a result, the rising trendline support could be breached in the next few hours.
Only a move above 6.9470 (daily high + resistance on the hourly chart) would weaken the bearish setup.

Omkar Godbole FXStreet Contributor

Hourly Chart

Spot Rate: 6.9358

Daily High: 6.9470

Daily Low: 6.9310

Trend: Bearish

Resistance

R1: 6.947 (resistance on the hourly chart)

R2: 6.9521 (previous day's high)

R3: 6.9584 (yearly high)

Support

S1: 6.9323 (rising trendline support)

S2: 6.9201 (200-hour EMA)

S3: 6.90 (psychological support)

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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