USD/CNH technical analysis: Upside break of 5-month falling trendline confirmed

USD/CNH bullish trend confirmed by a falling trendline breakout
Bullish case would be strengthened with a close above 6.7497

Omkar Godbole FXStreet Contributor

USD/CNH closed well above the confluence of the trendline connecting Nov. 30 and Dec. 21 highs and the 50-day moving average (MA) on Tuesday, confirming a bearish-to-bullish trend change.

The upside break of the trendline validates the bearish exhaustion signaled by the multiple long-tailed weekly candles.

As a result, the path of least resistance appears to be on the higher side. The bullish case would further strengthen if the pair closes above 6.7497 (March 28 high). That would open up upside toward the 200-day moving average (MA), currently at 6.8204.

The bullish case would weaken if the spot falls back below the falling trendline.

Daily chart

Trend: Bullish

Pivot points

1. R3 6.7578
2. R2 6.744
3. R1 6.7366
PP 6.7228
1. S1 6.7154
2. S2 6.7016
3. S3 6.6942

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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