USD/CNH technical analysis: At 5.5-week low, key indicator bearish for first since April 19

• USD/CNH has dropped to the lowest since May 13.
• The RSI is biased bearish for the first time in two months.
• USD/CNH risks falling to support at 6.8527.

The USD/CNH pair is currently trading at 6.8867 – the lowest level since May 13 – and could drop even further as the widely followed relative strength index (RSI) has turned bearish for the first time in two months.

The 14-day RSI has found acceptance below 50 and is currently seen at 44.50, the lowest level since April 19. A reading below 50 indicates the market is bearish.

Further, the 5- and 10-day moving averages (MAs) are trending south, validating the channel breakdown confirmed on June 18. The pair also violated the support at 6.8970 with a close at 6.8932 on Wednesday.

As a result, a deeper drop to 6.8527 looks likely. That level is the 38.2% Fibonacci retracement of the rally from April lows to June 7 highs.

Daily chart

Trend: Bearish

Technical Levels