USD/CNY Short
Updated
Look, no TA here more of an idea based around news that was just announced. China seems to be selling dollars here to prop up the value of their currency. According to the article:
"This adds to the earlier intervention efforts this week, with Reuters reporting that China's major state-owned banks were seen selling dollars again today in exchange for the yuan in the onshore market. One of the sources said that "the 7.25 level could be the floor (ceiling in the case for USD/CNY) in the near-term". -Forex/live
Now, I'm not taking this news at face-value. I am going to follow this idea as I think it's happening at an interesting time.
Yesterday many tech stocks (JD, BIDU, PDD, IQ, ZH) and ETFs (CQQQ, FXI, YINN) all showed long wick dojis.
I don't trade forex but this could be a development towards CNY gaining momentum which helps mitigate downward pressure on Asian markets.
I am long BABA starting yesterday and have a position in NIO from $8.60.
So yeah.... My idea: USDCNY red days have always correlated with HS (Hang Sang) up. Recently HS has been gaining momentum against the DXY moving up when normally it's inverse or near inverse 65% of the time. I think if we start to see CNY gain momentum, some of these tech stocks are really going to start moving.
Too many bears on China right now, news article after news article. Might be the time to make a contrarian trade.
"This adds to the earlier intervention efforts this week, with Reuters reporting that China's major state-owned banks were seen selling dollars again today in exchange for the yuan in the onshore market. One of the sources said that "the 7.25 level could be the floor (ceiling in the case for USD/CNY) in the near-term". -Forex/live
Now, I'm not taking this news at face-value. I am going to follow this idea as I think it's happening at an interesting time.
Yesterday many tech stocks (JD, BIDU, PDD, IQ, ZH) and ETFs (CQQQ, FXI, YINN) all showed long wick dojis.
I don't trade forex but this could be a development towards CNY gaining momentum which helps mitigate downward pressure on Asian markets.
I am long BABA starting yesterday and have a position in NIO from $8.60.
So yeah.... My idea: USDCNY red days have always correlated with HS (Hang Sang) up. Recently HS has been gaining momentum against the DXY moving up when normally it's inverse or near inverse 65% of the time. I think if we start to see CNY gain momentum, some of these tech stocks are really going to start moving.
Too many bears on China right now, news article after news article. Might be the time to make a contrarian trade.
Note
Played out really well so far. Closed out some of my China tech plays on Thursday 7/13. Entered RNW, see other idea.
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