Update on the Chinese Yuan
Updated
A few months ago, I proposed USDCNH/USDCNY consolidating for a bit and then going higher, as such strong moves usually follow through. The Chinese economy looks extremely weak for multiple reasons, and I see no way that the CNH/CNY won't lose much of its value relative to the dollar. Technically it is ready for another strong move higher, and the fact that Pelosi is visiting Taiwan could be the catalyst for a breakout.
Of course, I could be wrong, and the market has a pullback first. However, I think that would be a buy-the-dip opportunity. Going down to 6.6 would be a gift, and that's where I'd want to add to my long positions (short CNY). In my opinion, the market will take out the double top at 7.2$ first, maybe pull back, and then move significantly higher. However, my first target is a bit lower because I do some resistance there, as there was a breakdown that was never retested. Regardless of what your target is, the R/R here is tremendous.
Of course, I could be wrong, and the market has a pullback first. However, I think that would be a buy-the-dip opportunity. Going down to 6.6 would be a gift, and that's where I'd want to add to my long positions (short CNY). In my opinion, the market will take out the double top at 7.2$ first, maybe pull back, and then move significantly higher. However, my first target is a bit lower because I do some resistance there, as there was a breakdown that was never retested. Regardless of what your target is, the R/R here is tremendous.
Trade closed: target reached
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