USD/CNH Technical Analysis: Offshore yuan is not out of the woods yet

The USD/CNH hourly chart shows a falling wedge breakout - a bullish continuation pattern which indicates the pullback from the recent high of 6.9124 has ended and that level could be soon put to test.
The pullback allowed the daily relative strength index (RSI) to position itself in a more bull-friendly manner. As a result, there is scope for a re-test of 6.9124.
On the downside, a daily close below 6.8056 (Aug. 8 low) would confirm a short-term bull-to-bear trend change.

Omkar Godbole FXStreet Contributor

Hourly chart

Spot Rate: 6.8430.

Daily High: 6.8479

Daily Low: 6.8279

Trend: Bullish

Resistance

R1: 6.8566 (daily pivot resistance 1)

R2: 6.8823 (Aug. 2 high)

R3: 6.9124 (Aug. 3 high)

Support

S1: 6.8369 (10-day moving average)

S2: 6.8056 (Aug. 8 low)

S3:6.7738 (July 31 low)

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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