USD/CNH technical analysis: Bears may attack 50-day MA support

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  • Wednesday’s bearish outside bar candle indicates USD/CNH is heading south. 
  • The daily chart also shows a head-and-shoulders breakdown. 

USD/CNH is operating on slippery grounds and could drop to the 50-day moving average (MA) support at 7.0166 in the short term,
technical charts indicate. 

The currency pair formed a bearish outside bar candle on Wednesday, signaling the path of least resistance is to the downside. 

Further, the pair faced rejection at the head-and-shoulders neckline resistance on Wednesday, reinforcing the bearish view put forward by the breakdown confirmed on Oct. 18. 

The 14-day relative strength index (RSI) is also reporting bearish conditions with a below-50 print. 

The stage, therefore, looks set for a slide to the 50-day support. The bearish case would be invalidated if the spot rises above Wednesday’s high of 7.0855. 

Daily chart

Trend: Bearish

Technical analysis

 

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