USD/CNH Technical Analysis: lower highs favor a deeper drop

• The USD/CNH is currently reporting moderate losses at 6.9336 and could suffer a deeper drop to the trendline connecting the Aug. 27 and Sept. 21 lows, currently at 6.9127.

Daily chart

• The pair has charted a lower highs pattern at 6.9694 on Nov. 14 and the 5- and 10-day EMAs are beginning to roll over in favor of the bears.

4-hour chart

• The rising wedge breakdown seen in the chart above has likely put the bears back into the driver's seat. The relative strength index (RSI) has also adopted bullish bias with a move below 50.00.

Weekly chart

• The large bearish divergence of the RSI backs up the signs of bearish reversal seen in the daily and 4-hour chart. As a result, the pair is likely to test the 50-day EMA, currently at 6.90, in the near-term.