The USD/CNH pair is creating an inverse head-and-shoulders bullish reversal pattern with neckline resistance at 6.7145.
A breakout, if confirmed, would validate the bullish divergence of the relative strength index (RSI) and open the doors to 6.7557 (target as per the measured move method).
China has set its GDP growth target for 2019 at 6 percent to 6.5 percent – lower than last year’s goal of around 6.5 percent – amid debt crackdown and trade war with the US. Further, the US-China trade deal has likely been priced in. The pair, therefore, is vulnerable to “buy the fact” trade.
Put simply, an inverse head-and-shoulders breakout looks likely.
4-hour chart
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Trend: Bullish above 6.7145
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