USD/CNH Technical Analysis: Trapped in a symmetrical, eyes Fed speak

• Trapped in a symmetrical triangle or a narrowing price range, the USD/CNH is currently lacking a clear direction. The pair, however, may pick up a strong bid and rise through the upper edge of the triangle, confirming a bull breakout if the Fed policymakers, scheduled to speak this week, put more emphasis on the need for an above-neutral rate policy.

Daily chart

• As seen above, the triangle resistance is currently located at 6.9575 and the support is seen at 6.9262.
• A bull breakout, if confirmed, would signal a resumption of the rally and allow a test of the major psychological hurdle of 7.00. The 14-day relative strength index (RSI) of 55 indicates there is plenty of room to rally after the bull breakout.
• A triangle breakout, however, would validate the bearish divergence of the 14-week RSI and open the doors to a deeper pullback 6.80.