USD/CNH Technical Analysis: Potential inverse head-and-shoulders

Omkar Godbole FXStreet Contributor

The USD/CNH pair fell 0.4 percent yesterday, validating the bearish crossover between the 5 and 10-day moving averages.

The immediate bearish case, however, would weaken if the pair bounces off strongly from 6.7373-6.7350 support zone. That could be followed by a rally to 6.8033 (neckline of the inverse head-and-shoulders). A close above that level would confirm a bull reversal.

The probability of USD/CNH forming an inverse head-and-shoulders pattern would drop sharply if the support zone of 6.7373-6.7350 is convincingly breached.

Daily chart

Trend: bearish

1. R3 6.8153
2. R2 6.8002
3. R1 6.7727
PP 6.7576
1. S1 6.7301
2. S2 6.715
3. S3 6.6875

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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