News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
USD/CNH Technical Analysis: Chart Setup Hints at Bottoming

USD/CNH Technical Analysis: Chart Setup Hints at Bottoming

Ilya Spivak, Head Strategist, APAC

To receive Ilya's analysis directly via email, please SIGN UP HERE

Talking Points:

  • USD/CNH Technical Strategy: Flat
  • Bullish candlestick pattern hints US Dollar aiming higher vs. Chinese Yuan
  • Fundamental uncertainty, adverse risk/reward setup argue against exposure

The US Dollar may be preparing to turn higher against the Chinese Yuan in offshore trade after putting in a bullish Morning Star candlestick pattern. The greenback has failed to build on the setup thus far however, with prices seemingly waiting for a further catalyst to gain traction.

Near-term resistance is at 6.5505, the 14.6% Fibonacci expansion, with a break above that on a daily closing basis opening the door for a test of the 23.6% level at 6.5904. Alternatively, a reversal below the 61.8% Fib retracement at 6.4845 paves the way for a challenge of the 76.4% threshold at 6.4197.

Prices are hovering too close to near-term resistance to justify taking a long position from a risk/reward perspective. In broader terms, we continue to see it as imprudent to commit to CNH exposure against a backdrop of fundamental instability as the tug of war between Chinese officials and the markets continues.With that in mind, we remain flat.

Losing money trading in the FX market? This might be why.

USD/CNH Technical Analysis: Chart Setup Hints at Bottoming

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES