EUR/CNY: Failure to reclaim 7.83 could men continuation in decline – SocGen

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EUR/CNY plummeted below 7.75 following the ECB meeting, meaning it has lost almost 5% from the high this summer. Economists at Société Générale analyze the pair’s technical outlook.

April high of 7.69/7.68 is a potential support

EUR/CNY failed to overcome the trend line since 2014 at 8.11 and evolved within a Head and Shoulders pattern. Confirmation of the formation has resulted in a sharp down move. 

The pair is now in vicinity of April high of 7.69/7.68 which is a potential support. 

A short-term bounce can’t be ruled out however it would be interesting to see if the pair can reclaim the neckline at 7.83. Failure could mean continuation in decline. 

Below 7.68, next objectives are at the 200-DMA near 7.60 and target of the formation at 7.54.

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• Source: https://www.fxstreet.com/news/eur-cny-failure-to-reclaim-783-could-men-continuation-in-decline-socgen-202309150813