Economists at Société Générale analyze USD/CNH technical outlook.

Pause within uptrend

Short-term price action is likely to remain in a range.

USD/CNH up move faced stiff resistance near graphical levels of 7.27/7.30 representing the high of last September and has embarked on a phase of pullback. Recent bounce attempt has resulted in formation of a lower peak. Short-term price action is likely to remain in a range.

In case the pair fails to defend recent pivot low near 7.11/7.10, there would be risk of an extended down move.  

A break beyond 7.27/7.30 would be essential to confirm next leg of uptrend.