Technical Update - USDCNH in uncharted territory. Uptrend is stretched but no resistance ahead Technical Update - USDCNH in uncharted territory. Uptrend is stretched but no resistance ahead Technical Update - USDCNH in uncharted territory. Uptrend is stretched but no resistance ahead

Technical Update - USDCNH in uncharted territory. Uptrend is stretched but no resistance ahead

Forex 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

USDCNH spiked higher after the weekend touching the 1.382 projection of the recent correction at around 7.365.
Despite showing divergence on RSI there could be more upside for the pair. RSI is at the time of writing above its falling trendline and if it closes above there is strong indication of higher levels on both USDCNH and RSI which would mean RSI could trade out its divergence. For RSI to trade out its divergence it must take out the high 27th September – horizontal dashed line.

Source: Saxo Group

On medium-term longer-term there seems to be more upside. After USDCNH broke above previous highs around 7.20 it is headed towards the 1.382 projection of the 2020-2022 correction at around 7.54. Since we are in un-charted territory there are no strong resistance levels.
On both weekly and monthly time period RSI is at extreme levels but there is currently no divergence supporting the view of higher levels on USDCNH.
The very steep uptrend on weekly has touched the upper trend line in the channel pattern indicating USDCNH is ripe for a correction that could test the lower rising trendline.
However, the upper rising trendline is just shifted parallel from the lower and is not a strong resistance, merely just a guideline.
Support at around 7.00 and if that levels is taken out could become a trend change but until then trend is up on all-time periods.
An indication for a short-term correction would be if RSI on daily chart breaks below its lower rising trendline.

Source: Saxo Group
Source: Saxo Group

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