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CHINESE YUAN / U.S. DOLLAR

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RENMINBI AS A TRADE WAR PROXY & DOLLAR SHORTAGE(for macro nerds)USD/CNY: Two detailed bullet points ; Series on Currencies(feedback's always welcomed) - 7th of December 2019 First of all, this chart is simply a guide on how to analyse Dollar:Renminbi as a trade war proxy. As there are many economic variations and possible outcomes for 2020 at this point in time, I will not give recommendations for this chart. These are my subjective technicals and I will not analyse them, so don't follow them blindly. More importantly, let's take a look at some of the macro and fundamental perspectives. 1. 7 is a key level for the USD/CNY. Somehow the cross in August coincided with the inversion in yield curves, and the height of the trade war fears. Data backing up the cross at 7 is the decrease in Chinese holdings of treasuries (Ref #1), YoY down -4.27% . This indicates, that China is attempting to create a stronger dollar environment that corresponds with higher treasury yields, in order to alleviate some of the trade war tariff pains(higher yields=stronger $ ). Of course, treasuries are a global market, and China isn't able to completely influence the dollar At the stage with all the noise, it's very hard to exactly know what the trade war outcome will be, so I've given some of the scenarios on the chart. Furthermore, as FED cut rates, so did the PBoC (despite higher CPI , pork's here to blame) . This was their way of signalling that they're ready to devalue the yuan in case the trade war continues (Ref #2). The simplest way to read the Dollar/Yuan chart is with a dummy variable approach: If USDCNY<7= higher probability of a trade deal success and vice versa. 2. The DXY and USDSEK overlays combined with the 5-year lows in some of the emerging markets currencies(REF #5), indicating a global dollar shortage . These fears were somewhat dealt with as we had (Ref #3) three rate cuts this year and the start of QE:4, after the the repo market frenzy in August and September . Going into 2020, despite the FED being overly optimistic, I'm expecting that rates will further slide down to at least 1%. It all depends on how ambitious Trump is in terms of his trade war goals. The importance of USDSEK , simply is the fact that Sweden is such an open economy and the effect of these events mentioned above can serve as a way to cut all the trade news noise. A s expressed in the USDSEK chart, currently Swedish manufacturing numbers are well below 50, without the expected bounce for November(REF #6), despite the strong performance from equities . Along with other swedish economic data that's also performing poorly, without a doubt, this raises recession fears even further. To conclude this analysis on the Dollar:Renminbi, as mentioned in the intro- at this point there are many possible variations and many factors that could be analysed. I've already written a dozen posts on the trade war and the 2020 elections and it seems that it's impossible to give an easy and simple answer. One thing to expect for certain in 2020, is a rise in volatility . As the election cycle nears, there might be an increased pressure on Trump to get a deal done, so hopefully we'll get a more clear picture of the outcome of the trade war. Nevertheless, phase 1 is somewhat unimportant. Practically all the important negotiation points are pushed for phase 2 . Future may after all, seem interesting, but at the same time gloomy, and the show's just about to get started. This is it for Dollar:Yuan, feedback is always welcomed! -Step_ahead_ofthemarket- ________________________________________________________________________________________ >>I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories.>> However, if you'd like to support me and get informed in the greatest of details, every thumbs up and follow is greatly appreciated ! References & Disclosure: 1. Chinese Treasury holdings: ticdata.treasury.gov 2. PBoC Prime rates: tradingeconomics.com 3. FED Rates super cycle: 4. Treasury Yields: 5. Latin(emerging) markets currency index: www.bloomberg.com 6. Swedish Manufacturing data: tradingeconomics.com Disclosure: This is just an opinion, you decide what to do with your own money. For any further references or use of my content- contact me through any of my social media channels.
by step_ahead_ofthemarket
Could positive momentum on USD/CNY continue? Risk overall continues to ebb and flow on US-China trade uncertainty and looks somewhat asymmetric, tilted to the downside, based on our view that the HK Bill if passed through the House of Reps could seriously complicate trade talks and the signing of Phase 1. Stock markets are on the rise, and the risk-on atmosphere is weighing on USD, JPY and gold. Last week the US dollar made its the best performance in nearly 3 months against the Chinese Yuan. USD/CNY is likely to hold below 7.05/04 in the near-term with a possible decline likely to be limited around 7.00-6.95. On other side, the technical indicators are constructive, and there appears to be near-term potential rally to the 7.06/08 resistance area (the highs since October's end). The dollar moved above its 20-day SMA for the first time since mid-October. Also on the 4-hour chart this SMA coincide to the middle line of the Bollinger Badns and the price broke above it. It may offer support now. You should take in mind also China PMIs data at the end of the week. Another decline could seriously impinge on the soft landing narrative markets have been forming over the past few weeks and draw a market-negative reaction.
by ForexTrendline
Major Reversal In Play For CNY - A Must Track!!A good time to update the CNY chart with US away from their desks for thanksgiving. Both sides rolling back tariffs means that CNY has unlocked the gates for a retrace towards the key 76.4%. On the monetary side, updates from PBOC who continue sitting on the bid and are unlikely to change stance and keep CNY strong against the crosses, and as long as this remains the case the highs will be capped. Risks to my thesis come from another escalation in protectionism. For Chinese Equities the important and key 2793 is back in play again: Those following previously will remember trading the breakout to the topside, which is now clear was the final exhaustion leg. A textbook one to track for those wanting to dig deeper: For the technicals we are tracking a similar leg in nature to the sell-off in 2017, initial looking to target 6.9xx with extensions as low as 6.6xx and 6.4xx. While to the topside invalidation will come via a break of the highs. Best of luck all those on the CNY bid, jump into the comments with any questions and your views on CNY!
Short
by ridethepig
USDCNY - DAILY CHARTHi, today we are going to talk about USDCNY and its current landscape. We can observe at this timeframe, a confluence of technical factors, that entail a setup which might drive this asset to a new movement. The details of our analysis are highlighted in the chart above. Want to know more about our trades and ideas? Join the Traders Heaven today. Thank you for reading and leave your comments if you like. To have access to our exclusive contents, and see more of our work, join the Traders Heaven today! Link Below. Disclaimer: All content of Golden Dragon has only educational and informational purposes, and never should be used or take it as financial advice
Long
by Igor-Silva
FX Market Wobbly ahead of Trade War NewsFX Market Wobbly ahead of Trade War News The FX market is off to a soft start this week as traders await in silence new updates regarding the US-China trade war. Against the Japanese yen, the dollar was slightly higher at 108.81 yen. Against the euro, it was $1.1062, recovering from a monthly low of $1.0989 that came out on Thursday. Meanwhile, the British pound gained 0.2% to a two-week high at $1.2929. Select the Best Forex Brokers to trade with: • FXGiants • Orbex • XTB • The surge came after British Prime Minister Boris Johnson said that Conservative Party bets at the December elections had promised to support his Brexit deal. The US dollar index, which pits the buck against other major currencies, was lower at 97.905. This figure is the index’s weakest level since November 7. Elsewhere, the Aussie traded 0.2% lower at 0.6808 against the dollar. The Reserve Bank of Australia will release its policy meeting minutes on Tuesday. The ECB, meanwhile, will release its minutes this Thursday. FX Market Standing by for Trade War Updates Meanwhile, the CNY continued to be weak against the dollar at 7.0112. The People’s Bank of China cut interest rates during its seven-day reverse repo agreements. That was the first time since October 2015. China is currently trying to boost business confidence in the country after last week’s weak economic data results. Apart from that, traders have yet to see any big update on the trade war negotiations between the US and China. Chinese state media Xinhua reported that Vice Premier Liu He talked to US Treasury Secretary Steven Mnuchin. He also spoke with US Trade Representative Robert Lighthizer about a phase-one trade deal over the phone over the weekend. The report said the two sides had “constructive discussions” regarding “each other’s core concerns.” At the same time, positive signals came out of White House Economic Advisor Larry Kudlow. Last Friday, Kudlow said that the US and China were close to a deal.
by Financebroker
Dollar Firm on US-China Tariffs RollbackDollar Firm on US-China Tariffs Rollback The dollar took a neutral stance on Monday, as traders awaited further updates on the US-China tariffs rollback. The dollar index, which gauges the buck’s strength against a basket of six major currencies, was little changed at $98.26. It was not far from a four-week low. Against the euro, the currency slightly moved at $1.1031, reflecting investors’ concern over the risk of a deal collapsing. The greenback fell by 0.27% to ¥108.96 against the yen, as the unrest in Hong Kong continued. The latest reports stated that a Hong Kong policeman fired live rounds at protestors, and at least one person was wounded. Still, the Japanese currency held near its five-month high of ¥109.49 reached on Thursday. News of the latest escalation of violence in the region hit the Chinese yuan as well, dropping 0.18% to $7.0078 in offshore trade. Disappointing producer prices data also weighed on the yuan. The National Bureau of Statistics (NBS) showed on Saturday that the country’s producer price index (PPI) stumbled 1.6% in October. That was the weakest year-on-year price decline since August 2016. It also revealed the result of both demand and supply pressures on the world’s second-largest economy. Dollar Little Changed amid Hopes for US-China Tariffs Rollback The greenback’s moves were minimal. Meanwhile, progress over current trade agreements between the US and China puts investors in a cautious position. Both countries’ representatives stated last week that some of the duties would be withdrawn as part of a preliminary deal. Although US President Donald Trump later denied the news, he did not entirely dismiss the possibility of a deal. Market participants have become more cautious over the potential positive impact for global growth from a partial US-China trade deal following comments from President Trump, according to currency analyst Lee Hardman. Nevertheless, Hardman sees market confidence to continue hopes that the US-China tariffs war, which has significantly struck the global economy, might be coming to a close. A forex trader in Tokyo also stated that seeing China’s recent data, the US president could be telling the truth about China wanting a deal more than he did. Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!
by Financebroker
Dollars Move Slightly Ahead of Trade TalksDollars Move Slightly Ahead of Trade Talks After finding some support, dollars traded nearly flat on Tuesday. Investors in Asia are awaiting the results of the US-China trade talks in Washington later this week. The US dollar index last traded at 98.657, or 0.01% down from its last close. Meanwhile, against the CNY, the dollar dropped 0.3% to 7.1261. Over in Europe, the British pound extended its losses as EU leaders doubted whether a Brexit deal would come out on time. The deadline for the Brexit is on October 31, giving the two sides only three weeks to hammer out a deal. The GBPUSD pair lost 0.1%, while the EURUSD pair rose up 0.1%. Both the AUD and NZD gained 0.2% and 0.4%, respectively, against the USD. The Japanese yen, on the other hand, declined as the broader market climbed up. Against the yen, the greenback gained 0.1% to 107. Currency Traders Await Trade Talks www.financebrokerage.com On Thursday, high-level trade talks will resume. Chinese Vice Premier Liu He is meeting with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. The market isn’t expecting a trade deal to come out of the trade talks immediately. That’s because of reports that suggested the Chinese side was becoming increasingly reluctant to pursue a broader agreement. Moreover, tensions are higher after the US put eight Chinese technology companies on a blacklist. The US government cited accusations of human rights violations. Trump Under Investigation www.financebrokerage.com Over in the US, President Donald Trump is facing more problems. A New York Court recently required him to turn over eight years of personal and corporate tax returns. Trump is facing allegations of breaking a New York state law by reimbursing his former lawyer Michael Cohen for payments he made to Stormy Daniels, a porn star, during the 2016 election. The president will probably appeal that sitting presidents have immunity from criminal prosecution.
by Financebroker
USDCNY: New Long-term Pattern for risk seeking investors.The pair is currently pulling back after an annual high earlier this month with 1D already having turned neutral (RSI = 52.349, MACD = 0.019, Highs/Lows = -0.0174). This appears though to be only a technical Higher High retrace after what has been a very strong bullish sequence since mid April. We have spotted the very same pattern in 2014/2015 when USDCNY made Higher High after Higher High within a two year Channel Up. This Channel emerged after a Double Top and currently we see the same candle action after a nearly May/ June Double Top. The MA200 is there to support the uptrend long term and the MA50 to provide Buy Entries. Under these circumstances currency traders can target 7.3000 on the medium term and 7.6000 - 7.8000 on the long term. ** If you like our free content follow our profile (www.tradingview.com) to get more daily ideas. ** Comments and likes are greatly appreciated.
Long
by InvestingScope
USD/CNY - Even a hare will bite when it is cornered. Hi, today we are going to talk about Yuan Renminbi and its current landscape. We have a Double Top Breakout on USD/CNY with Volume and could bring the Yuan Renminbi to a dramatic devaluation against the US Dollar. Trough this daily chart, we can observe that China's central bank - (PBOC) had to remove or loosen the grip on it, allowing the currency fluctuation and their free precification by the market, without strong barriers programed by the PBOC. Thank you for reading and leave your comments if you like.
Long
by Igor-Silva