USD/CNH Technical analysis: Trapped in a sideways channel above 6.90

  • 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.

Hourly chart

Trend: Neutral

Pivot points

    1. R3 6.9614
    2. R2 6.9513
    3. R1 6.9437
  1. PP 6.9337
    1. S1 6.9261
    2. S2 6.916
    3. S3 6.9084


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