USD/CNH technical analysis: Sidelined near 7.11, potential head-and-shoulders on daily

USD/CNH's daily chart shows consecutive inside bar candlesticks.
A close below 7.09735 is needed to confirm a range breakdown.
The pair may end up creating a head-and-shoulders pattern after range breakdown.

Omkar Godbole FXStreet Contributor

USD/CNH is lacking a clear directional bias for the third straight day. The pair is currently trading at 7.11, having charted lower highs and higher lows over the last three days.

Essentially, the pair has created back-to-back inside bar candlestick patterns on the daily chart.

A break above 7.1260 – the high of the first inside bar candle created on Monday – would imply a resumption of the rally from Sept. 13's low of 7.0309.

Meanwhile, a close below 7.09735 – the low of the first inside bar candle created on Monday – would mean bearish reversal and expose levels below 7.06. Such a decline would mark the completion of an head-and-shoulders pattern on the daily chart.

As of now, the neckline support is seen around 7.0470. A close lower would confirm a breakdown and open the doors to 6.90 (target as per the measured move method).

Daily chart

Trend: Bearish below 7.09735

Technical levels

USD/CNH

Overview
Today last price	7.1101
Today Daily Change	0.0040
Today Daily Change %	0.06
Today daily open	7.1061

Trends
Daily SMA20	7.1179
Daily SMA50	7.0491
Daily SMA100	6.9754
Daily SMA200	6.8678

Levels
Previous Daily High	7.1235
Previous Daily Low	7.0988
Previous Weekly High	7.1313
Previous Weekly Low	7.046
Previous Monthly High	7.1838
Previous Monthly Low	6.894
Daily Fibonacci 38.2%	7.1083
Daily Fibonacci 61.8%	7.1141
Daily Pivot Point S1	7.0955
Daily Pivot Point S2	7.0848
Daily Pivot Point S3	7.0708
Daily Pivot Point R1	7.1201
Daily Pivot Point R2	7.1341
Daily Pivot Point R3	7.1448

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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