GBPAUD - LONGGBPAUD expecting this pair to head up to 2.03 and further once again. Both technical and fundamentals stack up. Good RR too
CNY
Chinese Yuan Is Going To Beat US Dollar Very HardStrong bullish rally and retracement at golden ratio:
The Chinese Yuan has been moving up with a strong bullish rally since June 2007 to January 2014 that is almost seven years that the Yuan has been moving up against the US dollars. Then from January 2014 to January 2017 the Chinese Yuan moved down and retraced at 0.618 Fibonacci level that is the golden ratio therefore there were strong chances that it will again move up from this golden ratio and as per expectations the Chinese Yuan moved up again and took another powerful bullish divergence from January 2017 to March 2018 and this move was upto 11.48% for more than a year.
Then from March 2018 the Chinese Yuan again started moving down against the US Dollar and at this time it is again at the same golden ratio of 0.618 Fibonacci level
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Down channel and volume profile and other indicators:
If we switch to the weekly chart then it can be clearly observed that from August 2018 the priceline of Chinese Yuan is now moving in a down channel. After August 2018 the price line has hit at the support of the channel on September 2019. Even though this time after hitting the resistance of the down channel the price action of Yuan is moving down but we can expect that this time the priceline will not reach the support of the channel. If we examine the price action of Yuan then in August 2018 we had the bollinger bands at the support of the channel. And when in Sep 2019 the price action was hitting for the second time on the support the channel at that time the bollinger bands was again at the support of the channel. But this time the Bollinger bands is above the support of this channel and there is a big distance between the support and the lower bands of the bollinger bands. Therefor this time the bollinger bands can play the role of biggest hurdle to stop the price action to move down up to the support of the channel.
Here I have also placed the volume profile on the complete price action moving within this channel and after placing the volume profile it can be clearly seen that the trader’s interest is very low below the $0.14. That is almost the same level where we have the lower bands of the Bollinger bands. And the point of control of the volume profile is at $0.1450 that is above the resistance of the channel. Therefore there are strong chances that the price action can move up at anytime at least up to the POC level of the volume profile. Because the point of control of the volume profile always works as a center of gravity for the priceline and whenever the candlesticks move up move down it always pulls back the price action towards itself. And if we see the behavior of the priceline since August 2018 up till now then it can be clearly seen whenever the price action moved up or moved down then it always moves back to the POC level.
Here I have also placed the stochastic and momentum indicators. And after placing these indicators we can observe that these both indicators are working in very synchronized manner with Bollinger bands. Whenever the price action hits the Bollinger bands support and stochastic and momentum both give the bull signals together then the priceline moves up to hit the resistance of the channel. Once it was happened on the candlestick of 27th August 2018 and after that the second time it was happened on the candlestick of 9th September 2019. At this time we can see the stochastic is again very close to the oversold zone and momentum is also bearish. Therefore I am again waiting bullish signals from these two indicators for the next bullish rally.
Bullish harmonic BAT signal:
The strongest bullish signal that I have received is that the price line of Chinese Yuan has completed a bullish BAT harmonic pattern on weekly chart. the formation of this harmonic move was started with the candlestick that was opened and closed on 2nd September 2019. And 1st leg was completed on the candlestick that was opened and closed on 28 January 2020. Then the priceline has been retraced upto 0.50 Fibonacci retracement level this was the first confirmation of the bullish BAT harmonic pattern. After this move we needed the Fibonacci projection between 0.382 to 0.886 Fib projection area of A to B leg and we can see that from 17th September 2020 to 9th March 2020 Chinese Yuan projected between this projection level that was the second confirmation for the bullish harmonic BAT pattern.
And finally the priceline is again dropped down and retraced upto 0.786 to 0.886 Fibonacci level and this is a final confirmation of completion of bullish BAT pattern. Now at this time the price action is moving in the potential reversal zone of this bullish BAT and at anytime the price action of Chinese Yuan can move up with a powerful bullish divergence. And as per Fibonacci sequence of sequence if BAT pattern it can be project between 0.382 to 0.786 Fib projection level of A to D leg.
Conclusion:
We can expect buying zone from $ 0.1407 to $ 0.14 because at $0.14 we have strong supports. And realistically sell target can be from $ 0.1423 to $ 0.1448.
If the Chinese Yuan will breakout the channel then we can even expect more powerful bullish rally against US Dollar for years.
USDCNH could drop below 7 to complete correctionIt looks like we can see this pair revisiting sub-7 area to hit the downside of the channel around 6.82.
ridethepig | CNY Market Commentary 2020.02.16On the technicals there is little to update while the resistance holds, despite the bounce via PBOC intervention on coronavirus risk flows. The only level in play to the topside is 7.0248 as it caps the highs in the current wave. Anything above will unlock a leg towards the next barrier at 7.0733.
The coronavirus short-circuit sadly temporarily disrupted the USD devaluation / reflationary growth theme. I am still holding shorts and active looking for a test of the 6.825x. Anything below that will open the floodgates for the major break:
As usual thanks for keeping support coming with the likes and comments, we'll open up the short-term flow after the Tokyo open in the comments below for those trading live!
RIDE THE PBOC !!!China returning from LNY and an (un)lucky -8% selloff taking the headlines as SHCOMP catches up to the bleeding across Global Equities since last week. Well done those that caught the move we traded live here:
A flawless -8% leg in a single gap; as long as the full extent in the impact of this virus remains unclear it will be difficult for SHCOMP to get back above 3,000. These retraces should be seen as good SHCOMP selling opportunities (although tricky in this case for some). The liquidity injection from PBOC will be enough to put the handbrake on the selloff, this area is of focus and here looking for 2983 to the topside while 2650 is the area of focus below.
China a much bigger part of global growth now; almost 2/3 of China is in shutdown meaning PMIs are likely to dip next month. We have some time to complete the retrace before reassessing if the coronavirus impact can be looked through or if we will need to change MT and LT outlooks.
A transmission leg, not for the feint of heart. Thanks as usual for keeping the support coming with your likes, comments, charts and etc! Good luck all those trading SHCOMP after the last 8% move we can afford to leave some chips on the table.
USDCNH, US Dollar - China Yuan: Falling WedgeFX:USDCNH
If a bullish breakout should occur on this falling wedge, we will eventually try to get back on this cross.
The first trade closed at a loss at 60% of the initial maximum risk.
In this way we had optimized the realized losses reducing as often happens the % at initial risk.
We do the same thing when trades follow our direction and also optimize profits.
What happens in this way?
We conclude trades in 45% of cases with a profit of 3/4 times the losses. We have even earned 20 times more than the initial risk a few times.
Our first goal is always not to lose money.
Why?
Because we have learned from the best traders in history, and we want to take part in that elite as well.
Happy Trading to All!
ridethepig | Sticking With Gold in CNY Here we can focus on the realms of reflationary risks that are around the corner, the struggle to shake out bulls is identical to the struggle we saw in 2016 which is reassuring, and for that reason our problem is reduced to a timing issue.
For those tracking the previous diagrams in Gold it is obvious in USD terms both on the Weekly and Daily.
Weekly:
Daily:
What is surprising is that the boat is still not fully loaded which is quite unusual to see this late in the game. The swings otherwise always appear as waves which are being defended and the defender is always assigned to a direction! Very true; but waves in a macro trend are swings of more importance. So it should seem relatively normal to treat them with full sizings and extensions.
Here is clearly a strong move in miners, though it involves the sharp threat of capitulation for bears. Which would make things much easier for trading XAU:
On the other hand there is also risk from 2's 5's:
Bears will have to overcome the entire flow which is now ready to continue marching forward towards the targets. For those tracking the end of year positioning flows for 2020 Q1, reflationary risks are around the corner!! After months of choppy waters , finally bulls are emerging from beneath the woodwork as we begin the flows towards 1650. I stick to my average forecast of XAUUSD $1650 and expect Gold to hit $1595, $1650 and $1800 on a 6, 12 and 24m basis. This is my final target in the 5 wave swing, afterwards I will expect Gold to enter in consolidation via profit taking.
Thanks for keeping the support coming with likes, comments, charts and etc. And as usual the comments are open for all.
ridethepig | CNY 2020 Macro MapIn a nutshell, I am expecting Copper to keep Chinese Equities afloat and recover Q120 with less uncertainty via fiscal policy and a rebound in exports. For those following the latest Hang Seng / Copper chart:
For the macro side, CNY will find a strong bid via trade tensions easing as we move into 2020 US elections. China's outlook for future generations is changing and while Trump protectionism causes USD devaluation via FED permanent operations. Flow wise I am expecting a lot of business to be done within 1H20 in FX markets, my main targets for 2020 remain at 6.85xx with momentum picking up in the decline through 2021.
The reflationary theme is picking up traction and if we see the Dollar materially decline it will be enough to provide some further growth to Chinese exports in Q1, however from Q2 onwards it will be countered via capex softening and provide a choppy consolidation range. I look for this to break in the second half of 2021 which will complete the macro driven pullback towards my main swing target at 6.50.
From a technical lens it should be no surprise we are trading the same key 6.949x from before in USDCNH:
While for those tracking the long term dollar devaluation we have covered the macro side in previous charts:
Good luck all those planning FX trades into 2020. The environment is going to become increasingly difficult as investors position around US election risks, more 2020 FX outlook reports along with other strategy research in the coming days and weeks. Thanks for keeping the support coming with likes and comments!
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!
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.
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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.
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.
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USDCNH: Head And Shoulders pattern is in the makingThere is a reversal H'N'S pattern is in the making.
Watch breakdown of the Neckline.
Target is set at the distance of the height subtracted form the Neckline.
Invalidation is above the Head of 7.1959
Elections Lift the Canadian LoonieElections Lift the Canadian Loonie www.financebrokerage.com
The Canadian loonie lifted when the country’s election results tilted to Justin Trudeau’s favor. The two-time Prime Minister won with a minority government on his second term.
Elections normally mean uncertainty over each party’s proposed economic policies, but this year was different in Canada. Similarities between the Conservative and Liberal party helped decrease investors’ uncertainty.
Justin Trudeau won a second term, but this means he will lead a minority government.
Donald Trump congratulated the prime minister despite their cold relationship. CAD/USD upped 0.07% at 0.7645.
Prior to the election announcements, analysts tip the CAD will climb higher regardless of its outcome.
The Canadian loonie also upped 0.05% against Sterling at 0.5897. The GBP/USD pair gained 0.2% to 1.2982 when UK PM Boris Johnson asked for an extension for the Brexit deal.
Meanwhile, the CAD/CNY pair went up 0.02% at 5.4061 despite reports signaling progress between US and China’s trade talks. President Trump announced that China began buying US-made agricultural products.
USD/CNY downed 0.03% at 7.0728.
The Prime Minister Partially Wins www.financebrokerage.com
Justin Trudeau’s party lost the majority vote from the series of scandals kicked off this year. The Liberals won 148 seats in the Canadian government, 41 seats less than its previous term in 2015.
Photos of the acting prime minister emerged, containing him wearing blackface on multiple occasions.
He pressured his attorney general not to prosecute SNC-Lavalin earlier this year. The company was facing fraud and corruption allegations.
Reports speculate the saga prompted some supporters to switch their support to other parties or refuse to vote. This also caused a decline for the Canadian loonie.
Trudeau repeatedly apologized, but the scandals labeled him as “hypocritical” and an “out-of-touch dilettante.”
In response, the Liberals questioned the Conservative party’s stand on abortion, same sex marriage, and climate change. The opposing party’s leader Andrew Scheer was uncomfortable talking about these issues.
Trudeau promised making large movements against climate change. He also said he will work nation-to-nation with indigenous people last 2015. Canadians raise more questions on his ability to follow through every year.
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.
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.
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Comments and likes are greatly appreciated.
btc/cnyusdPeople should begin to take notice of the price of Bitcoin in Chinese Yuan. This chart looks a bit more bullish than priced in USD.
I am looking for the price to break upwards starting around Sept 19th. It will probably grind its way up to 13,000 (USD) by end of Oct, come back to retest support, and blast through 13,800 (USD) by early-mid Dec. I am looking for minimum price target of 17,000 (USD) by end of year. Maximum price would be 21,000 (USD) in my estimation.
Who is really running the show here anyways?
USDCNH should complete correction before another rallyThe pair took a pause before another rally and this could mean the bad news for the global trade.
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.
Onshore/Offshore RMB (CNYCNH) approaches 2015 highOnshore/Offshore RMB (CNYCNH) spiked above 1.017 since late 2015 and early 2016, suggesting that capital is leaving Mainland China.
Forex Markets: RBA’s Rate Cuts LoomThe Australian dollar bounced off its lows today in the forex markets, although the Reserve Bank of Australia hinted at negative rates.
In a similar manner, the New Zealand dollar perked up as firmer-than-expected Chinese yuan fixing boosted risk sentiment.
The two currencies typically serve as liquid proxies for traders to hedge against emerging market risks. Australia and New Zealand also share China as their top trading partner.
The Aussie dollar traded higher at $0.67955 after the People’s Bank of China set the daily midpoint for the yuan.
Markets expected less strong fixing, but it came at 7.0211 yuan per dollar. This dispelled fears that China was going full-gear against the US, triggering a currency war.
The RBA’s Plan and the Forex Markets
RBA Governor Philip Lowe recently hinted at “unconventional methods” the bank could use to prop up the Australian economy.
Coming up the top is the prospect of negative interest rates. With negative interest rates, the bank aims to weaken the Australian dollar against other peers.
This could theoretically boost spending, charging the economy. On top of that, exports will get a boost from a weaker currency.
Although Lowe admitted no guarantee, such a plan is no longer new in the case of central banks. To boost their own economies, Switzerland, Japan, and Europe have adopted ultra-low rates. Japan, for one, has a below-zero interest rate.
Elsewhere in the forex markets, the yen is currently gaining traction, reaching stellar levels as hedge funds hoard the currency.
Concerns over the ongoing US-China trade war still loom large, with economists thinking it could eventually lead to a recession.
Against the US dollar, the yen reached 105.32, near its highest since March 2018. The yen also flexed against the euro and the British pound.
Source: www.financebrokerage.com
