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  • USD/CNH’s daily chart shows a bullish reversal pattern. 
  • October highs could come into play in the short-term. 

The path of least resistance for USD/CNH is on the higher side.

The pair jumped by 0.62% on Wednesday, violating the trendline sloping downwards from September and October highs. 

Wednesday’s gain also confirmed a symmetrical triangle breakout on the daily chart, confirming an end of the sell-off from September highs above 7.1950 and putting the bulls back into the driver’s seat. 

The breakout is also backed by an above-50 reading on the 14-day relative strength index and ascending 5- and 10-day averages. 

All in all, the stage looks set for a rally to the October high of 7.1675. A violation there would expose the October high of 7.1675, above which major resistance is seen at 7.1956 (September high). 

The bullish case would be invalidated if the spot finds acceptance under Wednesday’s low of 7.01712. 

Daily chart

Trend: Bullish

Technical levels