Buy USD/CNH Breakout

Price is currently at the 20EMA resistance point. Price is also resisted by the previous support turned resistance point at 6.8736. . If price can moved above this point, it would formed a trend reversal and target a move to the 38% Fibonacci correction point of the decline from the high of $7.0123 to the low today at 6.8449 at 6.9025. We saw a bullish Engulfing pattern early on the second candlestick after the low has been formed. This is another sign of a strong bullish trend reversal.

MACD has also given a bullish divergence with price, warning of a possible price low forming. MACD is still bearish with both its line below the zero line but both of MACD lines had a bullish crossover, offering a hint of a possible trend change. Stochastic has also given a bullish divergence warning. Stochastic is also trying to move above from the oversold extreme.

If price is above to move above 6.8740, we think price can go higher to 6.9025. Stop should be placed at 6.8620.

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