USD/CNH Technical Analysis: Yuan Hits Three-Month High
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- USD/CNH Technical Strategy: Flat
- US Dollar resumes decline, drops to lowest level in three months vs. Yuan
- Staying on the sidelines, opting to avoid unstable fundamental backdrop
The US Dollar came under renewed selling pressure after a brief period of consolidation, dropping to the lowest level in three months against the Chinese Yuan in offshore trade. A break below chart support hints continued losses are likely ahead.
From here, a push below the 38.2% Fibonacci expansion at 6.4547 paves the way for a challenge of the 50% level at 6.4225. Alternatively, a reversal back above the 23.6% Fib at 6.4945 sees the next upside barrier at 6.5190, the 14.6% expansion.
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 on the sidelines for the time being.
Losing money trading FX markets? This might be why.