USD/CNH Price Analysis: Seller exhaustion at three-month lows

• USD/CNH is sidelined in Asia, having printed three-month lows on Thursday. 
• Thursday's Doji candle represents downtrend exhaustion and neutralizes immediate bearish view,

USD/CNH dropped to a three-month low of 6.9809 on Thursday and ended up creating a Doji candle on the daily chart. 

A Doji comprises long shadows, representing two-way price action and a small body, representing a flat close. Usually, it is reflective of indecision in the marketplace. In this case, however, the Doji candle has appeared at multi-month lows and following a sell-off from the May 27 high of 7.1964 and represents seller exhaustion.

However, a reversal higher would be confirmed if the pair ends Friday above the Doji candle’s high of 7.00. Alternatively, a close below the Doji candle’s low of 6.9809 would imply a continuation of the sell-off from the highs seen in May. 

At press time, the pair is trading largely unchanged on the day at 6.9969. 

Daily chart

Trend: Seller exhaustion

Technical levels