USD/CNH technical analysis: Hits 2.5-month low, slow descent continues

• USD/CNH has hit the lowest level since mid-August.
• The daily chart shows a head-and-shoulders breakdown. 
• The pair looks set to test the 100-day average for first since early May.

USD/CNH pair fell to 7.02582 a few minutes ago. That was the lowest level since Aug. 14. 

The offshore Yuan (CNH) has gained ground in a slow and steady manner over the last two weeks, as suggested by the head-and-shoulders breakdown witnessed on Oct. 18. 

The 5- and 10-day moving averages (MAs) are trending south, indicating a bearish setup and the 14-day relative strength index (RSI) is reporting bearish conditions with a below-50 print. 

The USD/CNH pair looks set to test the 100-day average at 7.0251. That would be the first test of the long-term average since May 3. The bearish view would be invalidated above the 10-day MA at 7.0579. 

Daily chart

Trend: Bearish

Technical levels