USD/CNH Technical Analysis: Key falling trendline eroded amid escalating US-China trade tensions

• The USD/CNH pair closed well above the head-and-shoulders neckline yesterday, neutralizing the bearish outlook.
• The pair has found acceptance above the trendline sloping downwards from the Aug. 15 high and Aug. 23 high, meaning the path of least resistance is on the higher side. A bear revival is seen below 6.7810.
• The markets could offer yuan in response to escalating US-China trade tensions. The US President Trump ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week, according to Bloomberg News.

Hourly chart

Spot Rate: 6.8637

Daily High: 6.8713

Daily Low: 6.8554

Trend: Bullish

Resistance

R1: 6.8697 (50% Fib R of the recent pullback)

R2: 6.8906 (61.8% Fib R)

R3: 638955 (Aug. 23 high)

Support

S1: 6.8520 (100-day MA)

S2: 6.8391 (10-day MA)

S3: 6.8319 (50-day MA)