USD/CNH may fall 193 - 289 pips

7.1374 is our pivot point.

Our preference

The downside prevails as long as 7.1374 is resistance.

Alternative scenario

The upside breakout of 7.1374, would call for 7.1536 and 7.1632.

Comment

The RSI is trading below 30. This could mean that either the pair is in a lasting downtrend or just oversold and that therefore a rebound could shape (look for bullish divergence in this case). The MACD is negative and below its signal line. The configuration is negative. Moreover, the price is trading under both its 20 and 50 period moving average (respectively at 7.1328 and 7.1370). Finally, the USD/CNH has penetrated its lower Bollinger band (7.1241).

Supports and resistances

7.1632 **

7.1536 *

7.1374 **

7.1311

7.1219 last

7.1026

7.0930 **

7.0834 *

7.0738 **

Number of asterisks represents the strength of support and resistance levels.