USD/CNH Technical Analysis: Major support breached for first since April 2019
- USD/CNH has violated a long-term average on the weekly chart.
- The pair risks falling to the descending channel support near 6.8560.
USD/CNH fell by 0.79% last week, the biggest weekly loss since September, and closed below the 50-week average for the first time since April 2019.
The 50-week average is located at 6.92505 and could now act as resistance. The pair is currently sidelined around 6.9157.
The violation of major average support has bolstered the bearish setup represented by the weekly chart falling channel, descending 5- and 10-week averages and a below-50 reading on the 14-week relative strength index.
Also, there are no signs of seller exhaustion on the daily chart. So, the pair risks extending the ongoing sell-off to the falling channel support at 6.8561.
A close above the 10-week MA at 6.9878 is needed to invalidate the bearish setup.