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  • The USD/CNH closed yesterday at 6.8350, confirming a rising wedge breakdown on the daily chart and dipped below the 50-day moving average a few minutes before press time. The key moving average has come into play for the first time in five months.
  • The rising wedge breakdown indicates that sell-off from the Aug. 15 high of 6.9584 has resumed and could yield a re-test of 6.7810 (Aug. 27 low) in the near-term.
  • The 5-day and 10-day MAs are beginning to roll over in favor of the bears. Further, 14-day relative strength index (RSI) is teasing a drop into bearish territory below 50.00.
  • A break above 6.8927 (Sept. 18 high) will likely put the bulls back into the driver’s seat.

Daily Chart

Spot Rate: 6.8334

Daily High: 6.8380

Daily Low: 6.8286

Trend: Bearish

Resistance

R1: 6.8540 (10-day MA)

R2: 6.8927 (Sept. 18 high)

R3: 6.8955 (Aug. 24 high)

Support

S1: 6.8224 (Sept. 13 low)

S2: 6.7810 (Aug. 27 low)

S3: 6.7380 (July 26 low)