USD/CNH Price Analysis: Flag breakout remains elusive
- USD/CNH continues to trade inside a flag pattern on the 4-hour chart.
- A breakout is needed to revive the immediate bullish bias.
USD/CNH is currently trading at session lows near 7.1120, representing a 0.18% drop on the day, having faced rejection at 7.1380 early Thursday.
The reversal lower from 7.1380 marks a failure on the part of the bulls to push through the top end of a bull flag pattern seen on the 4-hour chart. A breakout would have meant a continuation of the rally from the March 9 low of 6.9042 and set the tone for a re-test of recent highs above 7.15.
However, with pair still stuck in a flag pattern, the immediate outlook remains neutral. The bias would turn bearish if the spot ends Thursday under Wednesday's low of 7.0584. That would invalidate Wednesday's bullish outside day candlestick pattern.