USDCNH Downtrend continues with a new lower low createdMy chart shows quite clear that the downtrend continues until the nearest control high gets violated.
Based on measured move, there might be another 350 pips drop from the current level.
USDCNH trade ideas
FX Update: Chinese renminbi opens 2021 with a jolt higherSummary: The market tried to set-off the reflationary fireworks as the first session of 2021 got underway, but while big moves up in some commodities and in particular crypto assets opened the year with a bang, the only move that is sticking well as the market rolls into North American hours is the move in the Chinese currency higher after weeks of quiet at the end of 2020. What gives?
FX Trading focus:
USDCNH plunges at a rapid clip – what gives?
The Chinese renminbi jolted higher on the first session of the New Year, a surprise move of considerable magnitude, and one that is no accident and sends a message – but what message? Arguably, the CNY strengthening is merely playing a bit of relative catchup with other US dollar crosses, as for example, AUDCNY exactly touched the 2020 high again on the last days of 2020 before dipping on this CNY rally. Perhaps that is the very message, that China wants to manage its currency in such a way as to keep it relatively strong, if not so strong as to break the range against the official basket, nor against any major trading partner By that way of thinking, then, AUDCNH might be a low beta trade for further CNH resilience and strength. This would be part and parcel of its strategic move to attract capital via a strong and stable currency and higher policy rates, allowing it to absorb demand from global Covid-19 stimulus and the luxury to keep a relatively tight policy to allow some scale of deleveraging that it never really pursued in previous cycles of recent date.
The other argument might be that in the reflationary world that threatens from both Covid-19 supply disruptions and the arrival of fiscal forcing, that China wants to maintain a firm currency to guard against rising price pressures from commodity imports. In any case, the focus from here will eventually shift on whether China plans to allow the renminbi to pull higher above the range high that marked the top in recent weeks – coinciding with two prior peaks in the last couple of years – and that level is only about a percent above the current level.
Chart: USDCNH
After a few weeks in which the USDCNH exchange rate largely ignored the weaker US dollar, the renminbi jolted higher to start the year in one of the biggest moves in recent memory and below the largely symbolic 6.50 area – never a particular chart level in focus in other cycles. I’ll hang on to the view that China is happy to keep the renminbi at the strong side of the range in the official basket without a major isolated appreciation (this view encouraged recently when the CNY stopped appreciating at the twice-touched area near 96.0), but will watch closely if that basket level moves above 96.0, which could suggest a willingness to allow it to appreciate further to the next major high around 98.0. Eventually, it will be interesting to see how the US-China relationship develops under a Biden presidency and how the exchange rate would react to higher inflation as well as a deepening dis-engagement of the two economies.
Georgia run-off races tilting Democratic?
After the terrible experience of believing in what proved horrible poll quality during the 2020 election, I am reluctant to even bring polls into the discussion, but there has been a move in favour of Democrats in the latest series of polls in Georgia, suggesting that both of the seats in the Senate run-offs there could yet go Democratic. This would create a 50-50 split in the US Senate that would allow VP Harris to cast the tie-breaking vote. These elections tomorrow are pivotal stuff, though far less so than had Biden won a commanding majority in both houses, as key conservative Democratic senators could still make themselves suddenly very important as key swing votes for further fiscal measures or if the climate agenda is seen as too radical for local constituents (thinking especially of West Virginia Democratic senator Joe Manchin here). Still, the bipartisan attitude toward bigger spending has witnessed a massive shift since the Obama years, and cleverly crafted, centrist initiatives from a Biden administration could find support from a cohort of more traditional Republicans with or without the two Georgia seats, a smaller population than they were formerly, but still not banished from existence by four years of Trump. The market’s initial read if the Democrats take both Senate run-off seats will be USD negative on the presumption of more fiscal stimulus potential).
John Hardy
Head of FX Strategy
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USDCNH weekly near term bottom to watchconfluence zone ~6.46 if we get there will watch PA for long opportunity
USD/CNH year in review: O$6.9672 H$7.1965 L$6.4885 C <=>$6.5060USD/CNH year in review:
O $6.9672
H $7.1965
L $6.4885
C <=> $6.5060
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USDCNH | Dec24 | Downtrend is ongoing, but...Lets make a LONG.
In this downtrend, bullish currently retesting the dynamic r/s.
Depend on how the the retest result., it could be cont a down trend or time of BULLISH ?
Value is with the Dollar."Price is what you pay, value is what you get" - warren Buffett
The Dollar is undervalued, the yuan is overvalued.
Peg them together.
Buy the United States Dollar, Sell the Chinese Yuan.
The Yuan Is The "One"Have you noticed the power and influence in the Chinese markets as of lately? They aren't done manipulating.
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 .
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.
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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.
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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.
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