USD/CNH Technical Analysis: Bearish invalidation

• The USD/CNH has moved above the head-and-shoulders neckline resistance (former support) of 6.8296, invalidating the short-term bearish view.
• A move above the descending trendline, drawn from the head high and the right shoulder high, would put the bulls back into the driver’s seat.
• A break below 6.7810 (weekly low) would put the focus back on the head-and-shoulders breakdown and could yield a deeper drop to 6.7638 (50-day moving average).

4-hour chart

Spot Rate: 6.8329

Daily High: 6.8360

Daily Low: 6.8151

Trend: Neutral

Resistance

R1: 6.86 (descending trendline)

R2: 6.8955 (right shoulder high)

R3: 6.9584 (recent high)

Support

S1: 68090 (5-day MA)

S2: 6.7810 (Aug. 27 low)

S3: 6.7638 (50-day MA)