USD/CNH technical analysis: Trapped in a pennant pattern

USD/CNH has charted lower highs and higher lows over the last three days.
A pennant breakout, if confirmed, would bolster the already bullish technical setup.

Omkar Godbole FXStreet Contributor

USD/CNH has created a narrowing price or a pennant pattern on the 4-hour chart in the last three day.

As of writing, the upper edge of the pennant is located at 7.1770 and the pennant support is seen at 7.1558.

A 4-hour close above 7.1770 would confirm the pennant breakout and signal a continuation of the rally from the Aug. 13 low of 6.9845.

Meanwhile, a pennant breakdown, if confirmed, would mean a temporary top has been made and could yield a pullback to 7.10.

As of writing, the pair is trading at 7.1692, representing little change on the day.

4-hour chart

Trend: Bullish

Pivot points

1. R3 7.1985
2. R2 7.1872
3. R1 7.1781
PP 7.1668
1. S1 7.1577
2. S2 7.1464
3. S3 7.1373

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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