Higher low on USD/CNH hints at countertrend bounce
Diupdate
Yield differentials between the US and China 2-year treasury note continue to suggest USD/CNH could be oversold, at least over the near-term. The daily close chart (above in black) also better shows the potential for a higher low, as part of a countertrend move.
The daily candlestick chart shows a recent pullback has failed to retest the 6.6976 low, and yesterday formed a 2-bar bullish reversal pattern (bullish piercing line). Whilst prices remain within a small retracement channel, we’re now looking for a break higher and minimum move to the highs around 0.6800 (near the monthly pivot point, 100% projection and recent highs).
Should it break higher, then the it has the potential to extend to the 138.2% or 161.8% projection levels, the latter of which is by the 200-day EMA.
Further out, I doubt Beijing will want their currency to depreciate too much given weak export data, so its possible the anticipated move higher is simply a countertrend move which could later break to new cycle lows.
The daily candlestick chart shows a recent pullback has failed to retest the 6.6976 low, and yesterday formed a 2-bar bullish reversal pattern (bullish piercing line). Whilst prices remain within a small retracement channel, we’re now looking for a break higher and minimum move to the highs around 0.6800 (near the monthly pivot point, 100% projection and recent highs).
Should it break higher, then the it has the potential to extend to the 138.2% or 161.8% projection levels, the latter of which is by the 200-day EMA.
Further out, I doubt Beijing will want their currency to depreciate too much given weak export data, so its possible the anticipated move higher is simply a countertrend move which could later break to new cycle lows.
Catatan
So far, so good - with the lower target already achieved. With money markets waking up to the prospects of a higher Fed rate and for longer, there could be some further upside to go for the USD in general.
Pernyataan Penyangkalan
Informasi dan publikasi tidak dimaksudkan untuk menjadi, dan bukan merupakan saran keuangan, investasi, perdagangan, atau rekomendasi lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Persyaratan Penggunaan.