USD/CNH Technical Analysis: Offshore yuan is not of the wood yet

• The USD/CNH hourly chart shows a falling wedge breakout - a bullish continuation pattern which indicates the pullback from the recent high of 6.9124 has ended and that level could be soon put to test.
• The pullback allowed the daily relative strength index (RSI) to position itself in a more bull-friendly manner. As a result, there is scope for a re-test of 6.9124.
• On the downside, a daily close below 6.8056 (Aug. 8 low) would confirm a short-term bull-to-bear trend change.

Hourly chart

Spot Rate: 6.8430.

Daily High: 6.8479

Daily Low: 6.8279

Trend: Bullish

Resistance

R1: 6.8566 (daily pivot resistance 1)

R2: 6.8823 (Aug. 2 high)

R3: 6.9124 (Aug. 3 high)

Support

S1: 6.8369 (10-day moving average)

S2: 6.8056 (Aug. 8 low)

S3:6.7738 (July 31 low)