- USD/CNH seems stuck in a sideways channel on the hourly chart.
- Trade tensions favor upside breakout, but indicators flashing overbought conditions.
USD/CNH is oscillating in a narrow range of 6.95-6.92 for the fourth straight day with key indicators flashing overbought conditions.
The widely followed 14-day relative strength index (RSI) is holding well above 70.00, a sign of overbuying.
Therefore, the channel seen on the hourly chart could be breached to the downside. That could yield a pullback to 6.87-6.85.
Trade tensions, however, continue to escalate with the US reportedly planning to cut off the flow of vital American technology to five Chinese companies.
As a result, a range breakdown could be short-lived or may remain elusive with USD/CNH rising above 6.95. That would expose the 2018 high of 6.98.
- R3 6.9614
- R2 6.9513
- R1 6.9437
- PP 6.9337
- S1 6.9261
- S2 6.916
- S3 6.9084
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