USD/CNH technical analysis: Probing 100-day MA for first since May

• The 100-day MA has come into play for the first time since early May. 
• A break lower would only strengthen the bearish setup and allow a deeper drop to 6.96.

USD/CNH is flirting with the 100-day moving average (MA) for the first time since May 3. The long-term average is currently located at 7.0254. 

A break lower would bolster the bearish technical setup represented by the head-and-shoulders breakdown on the daily chart and the downward sloping 5- and 10-day moving averages. The pair has convincingly breached the horizontal support of 7.0311 (Sept. 13 low). 

Meanwhile, the 14-day relative strength index is reporting bearish conditions with a below-50 print. 

Acceptance below the 100-day MA, therefore, could yield a deeper drop to 6.9623 (June 7 high). The outlook would turn bullish if lower highs setup is invalidated with a move above 7.10. 

Daily chart

Trend: Bearish

Technical levels