USD/CNH technical analysis: Teasing rising wedge breakdown on 4H

• USD/CNH's 4-hour chart shows a rising wedge pattern. 
• A breakdown would imply a bearish reversal and open the doors for 6.95.

China's offshore Yuan (CNH) exchange rate could gain altitude as the USD/CNH's 4-hour chart shows the pair has formed a bearish pattern.

The bounce from recent lows near 6.95 has taken the shape of a rising wedge, which comprises of trendlines connecting higher lows and higher highs. The trendlines, however, are converging – a sign of buyer exhaustion.

As a result, a drop below the lower trendline (rising wedge breakdown) is considered a bearish reversal pattern.

Currently, the pair is trading around the rising wedge support at 7.03. A breakdown, if confirmed, would open the doors for a retest of a recent low of 6.95. On the way lower, the pair may find support at 7.00.

4-hour chart

Trend: Bearish

Technical levels