- USD/CNH’s flag breakout suggests the path of least resistance is to the higher side.
- The daily chart also shows an impending golden crossover.
USD/CNH is currently sidelined above 7.12, having jumped by 0.40% from 7.0892 to 7.1166 on Wednesday.
The green candle created on Wednesday has confirmed a bull flag breakout on the daily chart. The bullish continuation pattern indicates the pullback from the March 19 high of 7.1653 has ended and the rally from the March 9 low of 6.948 has resumed.
The breakout, coupled with the impending golden cross or the bullish crossover of the 50- and 200-day averages, suggests scope for a test of the resistance at 7.1425 (March 25 high). A violation there would expose the recent high of 7.1653.
On the downside, a close under Wednesday’s low of 7.0780 would turn the tide in favor of the bears.
Daily chart
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Trend: Bullish
Technical levels
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