USD/CNH Technical Analysis: Potential inverse head-and-shoulders

The USD/CNH pair fell 0.4 percent yesterday, validating the bearish crossover between the 5 and 10-day moving averages. 

The immediate bearish case, however, would weaken if the pair bounces off strongly from 6.7373-6.7350 support zone. That could be followed by a rally to 6.8033 (neckline of the inverse head-and-shoulders). A close above that level would confirm a bull reversal. 

The probability of USD/CNH forming an inverse head-and-shoulders pattern would drop sharply if the support zone of 6.7373-6.7350 is convincingly breached. 

Daily chart

Trend: bearish