USD/CNH technical analysis: Trapped in a pennant pattern

• USD/CNH has charted lower highs and higher lows over the last three days.
• A pennant breakout, if confirmed, would bolster the already bullish technical setup.

USD/CNH has created a narrowing price or a pennant pattern on the 4-hour chart in the last three day.

As of writing, the upper edge of the pennant is located at 7.1770 and the pennant support is seen at 7.1558.

A 4-hour close above 7.1770 would confirm the pennant breakout and signal a continuation of the rally from the Aug. 13 low of 6.9845.

Meanwhile, a pennant breakdown, if confirmed, would mean a temporary top has been made and could yield a pullback to 7.10.

As of writing, the pair is trading at 7.1692, representing little change on the day.

4-hour chart

Trend: Bullish

Pivot points