USD/CNH Technical Analysis: Stuck in an expanding channel

• The bearish divergence of the daily relative strength index (RSI) indicates the USD/CNH (offshore yuan) could fall back to expanding channel support seen in the hourly chart 6.7275.
• On the other hand, a bullish breakout would signal a continuation of the rally from the July low of 6.5999 and would open the doors to 7.00.

Hourly chart

Spot Rate: 6.8444

Daily High: 6.8495

Daily Low: 6.8146

Trend: Cautiously bearish

Resistance

R1: 6.860 (last week’s high)

R2: 6.9169 (June 2017 high)

R3: 6.9313 (April 2017 high)

Support

S1: 6.8146 (session low)

S2: 6.7608 (5-week moving average)

S3: 6.7275 (expanding channel support)