USD/CNH Price Analysis: Bullish Flag breakout in progress, 6.90 eyed

• The greenback bulls are hopeful on Bullish Flag formation.
• Advancing 50- and 200-EMAs add to the upside filters.
• A (60.00-80.00) bullish range shift by the RSI (14) signals more upside ahead.

The USD/CNH pair is marching sharply higher and has printed an intraday high of 6.7483. The major is expected to form a bullish Double Distribution Day. The asset moved higher after an inventory distribution phase in a 6.7206-6.7267 range and is expected to form one more inventory distribution on the elevated levels.

A Bullish Flag formation on a four-hour scale is underpinning the greenback bulls. The formation of a Bullish Flag denotes a consolidation phase after a vertical upside move. The north-side sheer move is been recorded from May’s low at 75.98. The consolidation phase of a Bullish Flag indicates an initiative buying structure in which the buyers initiate longs after the establishment of a bullish bias. It is worth noting that the asset is attempting a breakout of the above-mentioned chart pattern, at the press time.

The asset is holding above the 50-period Exponential Moving Average (EMA) at 6.7085, which confirms a short-term bullish momentum. While the 200-EMA at 6.6947 is advancing swiftly, which warrants that the longer trend is intact.

Also, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which signals a continuation of upside momentum.

Should the asset oversteps June 14 high at 6.7855, the greenback bulls will drive the asset towards May 13 high at 6.8384, followed by the round-level resistance of 6.9000.

On the flip side, the greenback bulls could lose their control if the asset drops below June 15 low at 6.6668. The occurrence of the same will drag the asset towards June 3 low at 6.6138, followed by April 26 low at 6.5450.

USD/CNH four-hour chart