USD/CNH Technical Analysis: Pennant pattern seen on hourly chart

• The USD/CNH hourly chart shows a pennant pattern.. An upside breakout would mean continuation of the rally (or sell-off in offshore Yuan exchange rate) and would allow a break above the recent high of 6.7292.
• A technical correction would gather pace if the pennant is breached to the downside. This scenario is likely as the daily RSI is flashing overbought conditions.

Hourly chart

Spot Rate: 6.6982

Daily High: 6.7043

Daily Low: 6.6933

Trend: Depends on the direction of pennant breakout

Resistance

R1: 6.7292 (July 12 high)

R2: 6.7329 (July 3 high)

R3: 6.78 (Dec 2016 low)

Support

S1: 6.6741 (10-day MA)

S2: 6.65 (23.6% Fib R of June 14 low-July 14 high)

S3: 6.59 (July 10 low)