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USD/CNH Technical Analysis: hits lowest since Aug. 29, H&S breakdown confirmed

  • The USD/CNH pair (offshore yuan exchange rate) is currently trading at 6.8103, having clocked a low of 6.8056 earlier today - a level last seen on Aug. 29.
  • The minutes of the December Fed meeting released yesterday reinforced investors' expectations that the central bank could rein rate hikes, sending the US dollar lower across the board.
  • The USD/CNH pair closed well below 6.8367 yesterday, confirming a head-and-shoulders breakdown. Put simply, the rally from the March 2018 low of 6.2353 has ended and the bears have likely regained control.                
  • The 5-, 10-, and 20-day MAs are trending south indicating a bearish setup. The 14-day relative strength index (RSI) of 35 is also biased toward the bears.
  • The pair risks falling below 6.80, albeit after a minor bounce. Moreover, markets usually crowd out the weak hands before capitalizing on a major bearish or bullish move.

Daily Chart

Trend: minor bounce likely before further losses

USD/CNH

Overview:
    Today Last Price: 6.8113
    Today Daily change: 24 pips
    Today Daily change %: 0.0352%
    Today Daily Open: 6.8089
Trends:
    Previous Daily SMA20: 6.8804
    Previous Daily SMA50: 6.9037
    Previous Daily SMA100: 6.895
    Previous Daily SMA200: 6.7141
Levels:
    Previous Daily High: 6.8572
    Previous Daily Low: 6.8073
    Previous Weekly High: 6.8947
    Previous Weekly Low: 6.8594
    Previous Monthly High: 6.9509
    Previous Monthly Low: 6.826
    Previous Daily Fibonacci 38.2%: 6.8264
    Previous Daily Fibonacci 61.8%: 6.8382
    Previous Daily Pivot Point S1: 6.7917
    Previous Daily Pivot Point S2: 6.7746
    Previous Daily Pivot Point S3: 6.7418
    Previous Daily Pivot Point R1: 6.8417
    Previous Daily Pivot Point R2: 6.8744
    Previous Daily Pivot Point R3: 6.8916

 

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