USD/CNH Price Analysis: Drops towards 6.4600 inside fortnightly falling wedge

• USD/CNH remains pressured despite disappointing China official PMIs.
• Bullish chart pattern, sluggish momentum could restrict further downside.
• Key SMA confluence adds filters to the upside.

USD/CNH ignores China data while taking offers around 6.4605, down 0.08% intraday, ahead of Tuesday’s European session.

The offshore Chinese currency (CNH) pair refreshed intraday top following the first China Non-Manufacturing PMI contraction since February 2020. However, the following weakness not only reverses the early Asian gains but refreshes intraday lows inside a bullish chart pattern called a falling wedge.

Given the pair’s failures to rebound, the support line of the stated wedge near 6.4585 becomes an imminent target for intraday sellers. However, any further declines are likely being challenged by sluggish Momentum.

Even if the quote drops below 6.4585, July 30 low near 6.4510 adds to the downside filters.

Alternatively, recovery moves will have to stay beyond the 6.4700 threshold before trying to confirm the bullish chart pattern with an upside break of 6.4775.

However, 100-SMA and 50-SMA, respectively around 6.4800 and 6.4815, will act as a validation point for the pair’s following upside targeting late July tops near 6.5285. During the rally, the 6.5000 round-figure acts as an intermediate halt.

USD/CNH: Four-hour chart

Trend: Pullback expected