Technical analytics

USDCNY market technical outlook

Daily chart:

Growth of the pair is probably over - RSI oscillator has expressed an explicit bearish divergence at the last high, that is one of the attributes of downward reversal of an uptrend.

The key support, that guards the uptrend is lower Bollinger band (6.873). Alongside with the break of this level we might say about the start of a new downward wave.

H4-chart:

The price gap, that was formed after markets’ return from the weekend, was closed by a downward movement, therefore the quotes can get back to the area of upper Bollinger band (6.933) from current levels. Thus this area is the most perspective for short-trades opened with count on downward reversal of the trend.

H1-chart:

We note local support 6.902, from where we can expect growth towards 6.933. Thus we can go long in a short-term (from 6.902 to 6.933) and go short in a medium term (from 6.933 to 6.873).

Expectations:

So, we expect growth towards 6.933 and following downward reversal in direction 6.873.

Trading recommendations:

  1. Longs from 6.902 towards 6.933.

  2. Shorts from 6.933 towards 6.873.

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