USDCNH: Double bottom completion hints further upside

On Friday, the US Michigan Consumer Sentiment Index for February improved to a 13-month high at 66.4, beating market consensus of 65 and previous month data at 64.9. The dollar-bullish data release boosted the greenback against major currencies like the Euro, British Pound, Aussie dollar, Japanese yen and more. 

Moving our attention to the US Dollar/Offshore Chinese yuan (USDCNH) pair, the downbeat Chinese Consumer Price Index (CPI) and Producer Price Index (PPI) for January performed below market expectations, exerting pressure on the yuan. Looking at the daily chart, a completion of double bottom gives us an upside technical target around 6.903 (R2). Double bottom neckline around 6.812 (S1) should provide support in the event of a retracement lower.