USD/CNH Technical Analysis: Signs of bullish exhaustion

• The repeated failure to hold on to gains above 6.84, as seen in the hourly chart, could be an indication the USD/CNH bulls are likely running dry.
• The signs of bullish exhaustion only validate the large bearish relative strength index (RSI) seen in the daily chart.
• As a result, a pullback to levels below 6.80 could be on the cards and could happen today as the PBOC announced a stronger daily CNY fix.

Hourly chart

Spot Rate: 6.8220

Daily High: 6.8348

Daily Low: 6.8156

Trend: Bullish exhaustion

Resistance

R1: 6.84569 (previous day’s high)

R2: 6.8560 (July 27 high)

R3: 6.8810 (upper Bollinger band)

Support

S1: 6.80 (previous day’s low)

S2: 6.7737 (Tuesday’s low)

S3: 6.7527 (20-day moving average)