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USDCNH

DXY: Quarterly trend signal?There's a 60% chance that the dollar index will start trending rapidly and steadily, to eventually be 15-20% higher within 16 quarters or less. This would put it near resistance from the 90s rally top zone. I would look at FX signals more closely from here onwards. Observe the previous signals, the quarterly timeframe has been quite reliable in the dollar so far. This signal is valid while price holds over this quarter's open or by the time 16 quarters elapse (this active bar being the 1st one). Cheers, Ivan Labrie.
TVC:DXYLong
by IvanLabrie
1
ridethepig | CNY for the Yearly Close📌 CNY for the Yearly Close... In the usual tradition, this topping formation appeared to fit the bill! The correct way to play it was for sellers to proceed; dollar weakness was knocking while CNY was quite tenable. It is now obvious that the above mentioned development has been less time consuming that the initial legs higher: This means the position we are tracking into the yearly close appears quite harmless but is very alarming. Sellers are now threatening to occupy the lows, in addition it has been quite comfortable for them with Trump unable to say much, the Biden Whitehouse will ensure dollar devaluation with extreme care. This year has clearly been the year of the yuan. In order to chase the moves lower; let's look for some targets and areas to unload liquidity - I am tracking 6.242x for the minor targets and 6.040x for the major targets in 2021. This obviously recognises the charming continuations, sellers should look for any weak rallies to scale into towards year-end. Thanks as usual for keeping the feedback coming 👍 or 👎
Short
by ridethepig
USD CNH BUY (US DOLLAR - CHINESE YUAN)Hi there. Price is forming a reversal pattern to change its direction. These are the fundamental reasons for a possible USD/CNH bullish scenario: Sentiment shifts: Bullish scenario: A breakdown in US stimulus talks and a possible towards a government shutdown; FDA rejecting or postponing the approval of the Pfizer vaccine; a breakdown in Brexit talks with no deal by EU summit. In this scenario we would expect to see downside in equities across the board, with US equities expected to fall more if we see US stimulus talks break down and more downside for EU equities if we see Brexit talks collapse and upside in the dollar across the board. Strong equity sell offs are usually accompanied with some support for the US dollar as the world’s reserve currency and with its safe haven status as well as Japanese yen and Swiss franc .
by thunderpips
The Trend is Your Friend - USDCNHPlease don't forget to FOLLOW, LIKE, and COMMENT ... If you like my analysis:) Trade Safe - Trade Well Regards, Michael Harding 😎 Chief Technical Strategist @ LEFTURN Inc. RISK DISCLAIMER Information and opinions contained with this post are for educational purposes and do not constitute trading recommendations. Trading Forex on margin carries a high level of risk and may not be suitable for all investors. Before deciding to invest in Forex you should consider your knowledge, investment objectives, and your risk appetite. Only trade/invest with funds you can afford to lose.
Short
by Michael_Harding
USDCNH on a bear flag 🦐USDCNH after the break below the daily structure tested the 6.55000 area. The price after a false breakout retested the resistance area inside a minor channel. IF the market will break and close below the support structure we can set a nice short order according to Plancton's strategy. --–– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> <4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger. Leave a comment that is helpful or encouraging. Let's master the markets together
Short
by InkyGrip
8
USDCNH looking for a retest of structure 🦐USDCNH after the break below a weekly support is consolidating over a daily support. The price is on a long bearish wave and never retraced back. IF the price will break and close above the daily structure, we can set a nice long order according to Plancton's strategy. --–– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> <4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger. Leave a comment that is helpful or encouraging. Let's master the markets together
Long
by InkyGrip
2
Sell USD through NovemberHere is another index chart USD vs EUR and Chinese Yuan combined (two biggest trading partners of the USA) from which you can see massive bearish engulfing after price broke yearly floor. Even more bearish breakout from consolidation is observed on USDEUR*USDYJPY chart. You can not see this well if you look just at EURUSD or DXY (which does not even include Yuan) charts. EURUSD should hit 1.22 by the end of this month. This is what I was speaking in one of my posts a few days ago, a missing 3rd bullish Elliott wave in EURUSD daily. See (its "upside down" from the chart above - means bullish eurusd rallies through November) -
Short
by ICFX
1
Dollar will keep fallingChina is US' 2nd biggest trading partner after EU and watch what is happening with Dollar vs Yuan...dollar running through no volume zone, no liquidity to stop the fall. I marked where is next major support. Turnover between US and EU is not so different as that is with China. List of the largest trading partners of the United States 1 European Union 717,902 2 China 635,364 Sell dollar rallies on USDXXX pairs... Buy XXXUSD rallies...Eurusd is likely to hit 1.22.
Short
by ICFX
$USDCNH DRIVES USD WEAKNESS BUT POSSIBLE MEASURED MOVE COMPLETEUSDCNH has been a strong driver of USD weakness and has weakened more that 7% over 5months, straight line. Looking at the technical structure of the double top and breakdown right through the neckline levels, the measured move takes us down to where USDCNH put in a low last week at 6.627. Last week produced a reversal candle (though a weak one) closing around 6.665 just below the key 6.67 and 6.74 handles. There is momentum divergence on the lower lows and completes the measured move. Technically a strong case for a bounce here. PBOC are getting concerned about recent USD weakness which could hurt exports and meeting inflation targets. They will act to achieve their targets and this pivot zone looks like a good reference level on how much they are willing to let the CNY appreciate against the USD. For now, the added uncertainty of US elections and what it means for escalating US-China tensions means market sentiment will lean on the cautious side and see some safe have demand, and some upward consolidation in USDCNH. I don't have a position but keeping an eye on this as I engage in pro-USD trades.
Long
by doejistar
USD vs Chinese Yuan - KEY LEVELPrice development of USDCNH is likely to set the tone for US Dollar for the entire market. As this is a sort of "Hidden dollar index" as its correlated with EURUSD . Right now we saw dollar bounce back as we hit yearly low. Most likely it was a fakeout - piercing through the 2019 low. If this week closes with a pinbar dollar most likely bounce back. The way chart looks now its LONG but it may change. Lets see where we close tomorrow. We need more definite signs as there are price inefficiencies (yellow zones, illiquid rides) both directions. Price is set to fill them. If we see accumulation below the yearly low - the drop will continue. Top Absolute Correlation 1 Week 1 USDCNH - XNGUSD -73.9% 2 USDCNH - EURUSD -72.6% ----------------------------------------- 3 USDCNH - XAGUSD -72.6% 4 USDCNH - XAGEUR -71.8% 5 USDCNH - EURJPY -70.5% ---------------------------------------------- 6 USDCNH - XAGAUD -70.1% 7 USDCNH - USDSGD 69.5% 8 USDCNH - USDPLN 69.1% 9 USDCNH - NZDUSD -68.7% 10 USDCNH - USDCAD 68.4%
by ICFX
FX Update: Why the CNY is so strong. JPY waking up this morningSummary: The USD has weakened across the board and US long yields have risen to their highest level since June, unlike yield developments elsewhere. The strength in the Chinese renminbi needs a closer look as the fall in USDCNY accelerates, and the JPY is suddenly waking up this morning as USDJPY slips back below 105.00. Elsewhere, sterling complacency is creeping back into the picture. Trading focus: A breakdown of factors driving CNY strength The USDCNY move lower has continued apace, even accelerating in recent sessions after China recently removed a policy that was intended to limit speculation against the currency. The latest move has taken USDCNY well below the early 2019 lows and more than 7% below the highs from this spring. The move is not an accident and is driven by both fundamental factors and by the fact that China would only allow a directional move of this scale to develop if it is in the interest of its longer term agenda. So, a few factors that are driving the CNY higher and could continue to do so unless China decides that enough is enough (perhaps more likely now that the broad CNY basket is reaching the top of its multi-year band – allowing it to move more than another two percent higher would be an even louder signal). External stimulus and easing, relative domestic tightness – the PBOC has run a rather tight policy, to say the least, relative to the rest of the world, where the stimulus flood and chopping of interest rates has eroded fundamentals for foreign FX relative to the tighter domestic market in China and still very positive interest rates. As well, China had the luxury, as the world’s factory to allow foreign stimulus to provide powerful stimulus to its industries, whether for PPE or other goods. Long term interest in CNY stability – as the US-China divide and rivalry is likely to deepen over the longer term horizon, China needs to move away from its dependence on the US dollar and exposure to the weaponization of the dollar in global financial infrastructure and trade and needs to provide a stable and strong CNY to excite interest in capital flows back into Chinese asset – with China’s sovereign bond and other markets needing to deepen Biden presidency to ease pressure on China – this may be secondary and I am less convinced on this narrative, but there is a widespread belief that a Joe Biden administration will put less pressure on China than a “second term Trump unleashed” scenario. We’re not convinced, but Biden has criticized Trump’s tariff approach. Chart: USDCNH The USDCNH has now traded below the 2019 lows and the broader CNY basket at its current level is basically at the highs of the range since the spring of 2018. If China is unwilling to allow the CNY to continue stronger versus the basket, a weaker US dollar would have to do the heavy lifting and China might offset some of the pressure on its currency by buying other currencies in its reserve mix (a very opaque situation there as Chinese official reserves data has not moved in years). Further downside from here might require more pronounced USD weakness from here rather than broad CNY strength unless China is looking for a stronger currency across the board even from these levels. USD weak and US yields at long end rise to new multi-month highs The US dollar weakened yesterday on the same day that US yields rose to new highs, with much of the latter coming somewhat oddly overnight in the Asian session. The narrative driving this is apparently that stimulus will either come now or massively so later (under presumed Democratic clean sweep as odd solidify in that direction) and that this will drive US inflation rates higher and real rates lower. Democrat House Speaker Pelosi and the Trump administration are still negotiating despite yesterday’s declared deadline (from Pelosi’s side) coming and going. I am not fully convinced that this is the case and wonder if some of the bond weakness is down to the rise in bond volatility driving technical adjustments in bond portfolio allocations, whether in risk parity models or in basic ratioed portfolios as recent risky asset volatility has seen no offsetting upside in US treasuries. On that note, I am still skeptical of a major USD directional move unfolding until we get to the other side of the US election. The JPY wakes up this morning. Normally, with higher US yields we would not be looking for pronounced JPY strength, but the fact that US yields are moving independently of yields elsewhere is a bit novel and weak risk sentiment is providing a JPY boost as well – although that particularly cylinder has fired erratically at best for many months now. Regardless, USDJPY is having a poke below 105.00 suddenly this morning, a move that keeps the focus on JPY crosses and one that clashes with the recent USD weakening move as the JPY and USD have been tightly correlated in most crosses for years. Today’s G-10 rundowsn USD – I am not sold on the narrative and afraid of taking away too much from this USD weakening move – wouldn’t take much for the greenback to spoilthe latest attempt at making a directional statement. Longer term is a different matter, but we need to get to other side of election and would prefer a partial options position for now rather than high conviction spot trades. EUR – the euro running up to new highs, perhaps in part on the massive interest in the EU’s first social bonds issued directly by the EU in connection with the pandemic relief effort. Key technically for EURUSD to maintain above 1.1850 here to keep interest in a test toward 1.2000. But is market ready to get aggressive on a view on the USD before the US election result? JPY – a look at yields ex-US suggests that the JPY need not sweat the rise in US yields unless we see global long yields dragged higher still. Risk sentiment is likewise strong in EM carry trades, etc., but we’ll watch this USDJPY situation closely if we stay below 105.00 as traders may be complacent on hedging flow risks if the JPY rally move here broadens. GBP – sterling taking back about half of the recently lost terrain on the latest rhetoric and some sources suggesting that some of the UK position is theatre . The EU’s Barnier made flattering overtures on the UK’s sovereignty and said a deal is within reach in a speech this morning. CHF – no spin here – below 1.0700 in EURCHF needed to merit attention, and really below 1.0600. AUD – a popular short in the crosses as the RBA the only central bank able to gin up expectations of a significant shift in policy recently. That shift is likely large done. Further AUD downside would need a challenge to the reflation narrative, weaker global outlook, CNY to stop rallying, etc.. not to mention a technical break of 0.7000 in AUDUSD and 74.00 in AUDJPY. CAD – a relative winner in the crosses, but not much more range to work with to 1.3000, which my hold until we get to other side of election to see if the USD bears kicks off then. NZD – winning out relative to AUD on the RBA dovish shift, but hard time seeing significant room for further weakness in AUDNZD beyond another percent or two – watching 200-day moving average there at 1.0625 next. SEK – the krona has held in well during the recent Covid-19 resurgence and weaker outlook now for the EU, but looking for significant further EURSEK downside now a tough call. NOK – call us contrarian to further upside in EURNOK beyond 11.00 for now unless we get a new oil sell-off and more profound weakening in risk sentiment. John Hardy Head of FX Strategy Disclaimer The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. 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