Talking Points:
- USD/CNH found support around 6.6500, formed a “Doji” candle
- A daily close around current levels will complete a reversal pattern
- 6.7 remains the big level to watch on strength
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The US Dollar is trading higher versus the Chinese Yuan in offshore trade, as the pair found support around the 6.6500 level mentioned in prior reports.
The USD/CNH formed a “Doji” candle around support and a daily close around current prices will complete a bullish “morning star” pattern after a bounce higher.
Indeed, the pair might be trading in anticipation of the FOMC rate decision Wednesday, which could prove to be a catalyst for another attempt at the big 6.7 handle, which has thus far capped gains as resistance.
The pair is currently trading around interim resistance at the last swing low around 6.6700 and a break higher might expose potential resistance at 6.6860 followed by the 6.7 handle.
A break below 6.6500 seems likely to shift focus to the last swing low at 6.6224, which also coincides with a long term up trend line.
USD/CNH Daily Chart: September 19, 2016
--- 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
