USD/CNH Technical Analysis: Bull flag on 1H, China export orders drop for 5th straight month

• The USD/CNH has charted a bull flag-like pattern on the hourly chart.
• An upside break, that is, a move above the top end of the flag would signal a continuation of the rally from 6.8151 (Aug. 29 low) and open the doors to 6.9150 (target as per the measured height method).
• The macro data released today showed the trade with the US is having an adverse impact on the Chinese exports: China Caixin PMI, which surveys small and medium-sized export-oriented units, hit a 14-month low of 50.6 in August and new export orders fell for the 5th straight month.
• The weak data and the escalating trade tiff with the world's largest economy could hurt the onshore (CNY) and offshore (CNH) yuan exchange rate and could yield a bull flag breakout in the USD/CNH pair.

Hourly chart

Spot Rate: 6.8515

Daily High: 6.8584

Daily Low: 6.8409

Trend: Eyes bull flag breakout

Resistance

R1: 6.8755 (Thursday's high)

R2: 6.8955 (Aug. 24 high)

R3: 6.9150 (bull flag breakout target)

Support

S1: 6.8409 (session low)

S2: 6.7810 (Aug. 27 low)

S3: 6.7380 (July 26 low)