USD/CNH Technical Analysis: Off 5.5-month lows, but bears remain in control
- USD/CNH has recovered slightly from 5.5-month lows.
- The weekly chart is still reporting a strong bearish bias.
- The pair appears on track to test support near 6.8622.
USD/CNH has bounced slightly from multi-month lows, but the path of least resistance remains to the downside.
The pair is currently trading at 6.9264, having hit a low of 6.9169 Thursday. That was the lowest level since Aug. 1.
While the pair has recovered from 5.5-month low, the pair is still trapped in a falling channel on the weekly chart with the relative strength index reporting bearish conditions with a below-50 print.
Further, the weekly candle has convincingly breached the trendline rising from March 2018 and April 2019 lows, having faced rejection at the descending 5-week average.
All in all, the odds remain stacked in favor of a deeper slide to the falling channel support, currently seen at 6.8622.
A close above 7.0217 (December high) is needed to invalidate the lower highs setup on the daily chart and weaken the case for a slide to 6.8622, put forward by the weekly chart.