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USD/CNH Technical Analysis: Resistance at 6.6860 Proving its Merit

DailyFX.com -

Talking Points:

- USD/CNH found support around 6.6500, formed a “Morning Star” bullish pattern

- Pair trading in a narrow short term range between 6.6700 and 6.6860

- 6.7 breakout key for any real bullish conviction

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The US Dollar remains elevated versus the Chinese Yuan in offshore trade, as the pair currently trades in proximity to the 6.6860 interim resistance level.

Having formed a “Morning Star” bullish technical pattern around support at 6.6500, the pair traded higher until hitting the aforementioned resistance level, which has since capped gains.

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At this stage, the pair is trading in a narrow short term range between the 6.6700 short term support level and the 6.6860 resistance.

A break above resistance at 6.6860 might expose the 6.7 handle, which seems key for any real bullish conviction; a break higher might be required to signal a continuation of the bullish trend.

A break below 6.6700 seems likely to shift focus to 6.6500 followed by 6.6224, which also coincides with a long term up trend line.

It’s important to note the both the Yuan’s onshore and offshore borrowing rates may increase ahead of the Chinese “National Day “ holiday.

USD/CNH Daily Chart: September 26, 2016

USD/CNH Technical Analysis: Resistance at 6.6860 Proving its Merit
USD/CNH Technical Analysis: Resistance at 6.6860 Proving its Merit

--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com

To contact Oded Shimoni, e-mail oshimoni@dailyfx.com

Follow him on Twitter at @OdedShimoni


original source

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