USD/CNH technical analysis: Charts favor break above 6.90, China’s manufacturing PMI remains below 50

• USD/CNH looks north with bullish price pattern on the daily chart. 
• Daily chart indicators like the RSI are also biased bullish
• China’s manufacturing activity contracted in July, the NBS PMI released at 01:00 GMT showed. 

USD/CNH is looking north and could find acceptance above 6.90 this week, technical charts indicate. 

The daily chart shows a falling channel breakout. The 14-day relative strength index is reporting bullish conditions with an above-50 print. Further, the moving average convergence divergence (MACD) histogram has turned bullish for the first time since May. 

So, a break above the psychological resistance of 6.90 looks likely. As of writing, the pair is trading at 6.8910, representing marginal gains on the day. 

The data released at 01:00 GMT showed, China’s NBS Manufacturing PMI (Jul), which primarily focuses on state owned enterprises, ticked up to 49.7, beating the expected print of 49.6 and up from June’s print of 49.4. 

The data narrowly bettered estimate, but remained below 50.00, meaning the sector contracted in July. 

The Non-Manufacturing PMI (Jul) was also released at 01:00 GMT. The number came in at 53.7, missing the estimate of 54.5 and down from the previous month’s print of 54.2. 

So far, however, the PMI numbers have failed to move the needle on the USD/CNH pair. 

Daily chart

Trend: Bullish

Pivot points