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USDCNH

USDCNH Facing Bearish Pressure | 9th June 2021USDCNH broke below ascending trendline support (now resistance). Price has also tested and pulledback below this trendline resistance. A further drop below our entry and Key 61.8% Fibonacci retracement level at 6.40076, with a possible downside target at 6.37686 could be possible. Our take profit at 6.37686 is also in line with a Fibonacci confluence zone where we have -27.20% Fibonacci retracement and 100% Fibonacci extension . Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by FXCM
1
USDCNH | Perspective for the new week The price moved against expectation as it continues to find lower lows in the last one month (you might want to see the link below for reference purposes); As part of China’s move to create awareness of its digital Yuan, authorities in Shanghai is planning to distribute $3 million worth of the central bank-issued currency among residents of Shanghai in the form of a lottery. Coupled with the appearance of a Descending Channel, this development appears to give a level of cynosure for investors as I anticipate a risk of further decline for the USDCNH pair in the coming week(s). Tendency: Downtrend (Bearish) Structure: Supply & Demand | Channel | Breakdown | Harmonic pattern (AB = CD) Observation: i. Since late March 2021, the price has been caught up within a Descending channel as the Greenback experiences risk of further decline in the nearest future. ii. As represented on the chart, connecting the lower highs and lower lows of price action with parallel trendlines reveals a downward trend that appears to hold following the Breakdown and retest of Y6.41000. iii. Below the Key level @ Y6.39600 remains a yardstick for entry opportunity as I look forward to a transition into a Harmonic pattern (AB = CD) with parameters explained below; a. Impulse A-to-B is expected to be in harmony with the potential C-to-D leg. b. The B- to-C leg is currently at 61.8% Fibonacci retracement (with the possibility of a 78.6%) of the A-to-B leg. c. The C-to-D leg is expected to fall within 127.2 - 1.414% Fib. ext . of the A-to-B move @ Y6.32000 area. Trading plan: SELL confirmation with a minimum potential profit of 550 pips. Risk/Reward : 1:4 Potential Duration: 4 to 8 days NB: This speculation might be considered to make individual decisions on the lower timeframe. Watch this space for updates as price action is been monitored. Risk Disclaimer: Margin trading in the foreign exchange market (including commodity trading, CFDs, stocks etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility. You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment. I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith. Past performance is not necessarily indicative of future results.
Short
by darcsherry
2
USDCNH | Perspective for the new weekThe prospects for further downside in USD/CNH remain a dominant subject amongst market makers as China is rolling out a digital yuan that will make her the world's second-largest economy the first country to create its own digital currency; I see a Reversal setup building up with structural tendencies that might drive the Greenback to higher highs in the coming week(s). Tendency: Uptrend ( Bullish ) Structure: Breakout | Supply & Demand | Reversal pattern Observation: i. Since mid-February 2021; the price of the Dollar has risen as it continues to find Higher highs until a successful Breakout of Key level happened early in March 2021. ii. It is obvious that the Y6.54000/6.50000 that has been a strong Supply zone for close to 3 months was finally hijacked by buyers in March 2021 with a successful Breakout. iii. Following the Breakout, the price found a niche around Y6.48000 which appeared to be a new Demand zone for Bullish expectation. iv. Taking a long term perspective view on the weekly chart; I see price action transition into a Corrective phase after the Impulsive Bearish move that began mid-last year in the coming week(s) hence my Bullish bias. v. With my Key level marked @ Y6.49000, I shall be looking forward to buying opportunity above this level to join the potential rally. Trading plan: BUY confirmation with a minimum potential profit of 1,800 pips. Risk/Reward : 1:6 Potential Duration: 15 to 25days NB: This speculation might be considered to make individual decisions on the lower timeframe. Watch this space for updates as price action is been monitored. Risk Disclaimer: Margin trading in the foreign exchange market (including foreign exchange trading, CFDs, etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility. You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment. I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith. Past performance is not necessarily indicative of future results.
Long
by darcsherry
Chinese letting the USD recover while they conquer the universeIf you like Elliott waves this pair is doing a wave 4, looking at the chart more than just ultra zoomed in we can see those appear previously: On 1 hour the price is going ABC and ending with a strong red candle like some "capitulation" I think it can drop quickly a last time then reverse. If the price on this 1 hour makes a double bottom or V shape bounce is not important and I don't look too much into it buyers are sellers are fighting on the daily chart, this has nothing to do with day gambling as retail does not trade this pair AUDNZD still has 40 times more myfxbook positions than USDCNH, AUDNZD more relevant to the world economy according to retail :) It just hits the eyes, clearly this is not part of the big 2020 downtrend where China was rearing a dumper truck full of usd and unloading. What China FX reserves are made of is classified info, all I know is they are human and they are all the same, they are done selling for now (not contractual info), I'm sure they have some usd left at least a trillion, not in their best interest for the USD to go to zero (yet). I don't know who the dumbasses buying the USD are, well there is me 🙂, but anyway there are always buyers; Since this is now clear to everyone it is not just a little pullback in a downtrend it could continue for a little while. When it went down it did following a clear trendline all the way down, now it is following a trendline on the way up. A bit too simple... The chinese all too communist to make money in the exchange markets? But Karl Marx loved the markets (probably due to a "I don't want to work if only I could make a lot of money on a luck streak" and gambler mentality). Plus chinese government letting everyone know what they are doing in advance haha. Maybe it's not "inefficient" as US regulators love to say, it's simply that in the absence of retail gamblers no one is stupid enough to go against the painfully obvious trend when the government announces what they are doing? How is sentence even a thing, how are these people so bad? 😆 Nah they're a tiny minority in FX they can't possibly have a significant impact, just bankers hate risks and love simple trendlines, and FX doesn't have that many speculators trying to extract money since 2008-2013. FX undervalued by now. The USA are not part of the OBOR/BRI project. China not investing long term into the US, their future commercial mega-empire does not need them doesn't mean they don't need them NOW. Idk not much more to say, the price here is at the risk point it could reverse from here so best cheapest place to take a buy, close to getting invalidated, maximum financial opportunity.
Long
by MrRenev
2
7 MOST IMPORTANT CHARTS TO WATCH RIGHT NOW1. VIX is filling the gap from when the Feb-Mar crash begun. Volatility is getting supressed when things actually look very fragile with Central Banks having nothing under control. A VIX spike (big move down for stocks) wouldn't be a surprise here for reasons I'll explain soon. 2. DXY looking strong here. The 50 DMA has turned up and dollar strength could be a problem here. Watching other charts tells me things are OK, so the weakness comes from specific currencies. Some currencies are doing very well while others very poorly and there is no concrete way to go about it. 3. CNH/CNY however are very clear as to what is going on. They seem to be in agreement with the DXY. The relentless USD downtrend has been broken and the USD is showing signs of life. Despite the QE, despite the massive stimulus... the USD hasn't gone down. That's not a great sign. Sure most currencies are getting devalued, but if the USD is so strong and could begin an uptrend we have a problem... 4. Essentially most of that is attributed to US long term rates going up faster than anywhere else. This could be happening for many reasons, right or wrong. Inflation might be here, inflation might be coming... but it depends on which country you are looking at and in what form you are seeing it. Is it because of supply shocks (i.e low Oil and Copper production), currency debasement, loss of faith in the currency or trade wars etc? It could be many combined, but when we see bonds go down it could the fact that we have a lot of supply coming in and not enough demand. Maybe we had such a big bull market that people are taking profit. However the impact this has on the market is on many different levels and it comes down to how the market is structured, stock valuation models, different investment strategies and so on. So the more yields go up (bonds down), the bigger the problem becomes if it is relentless. 5. Gold has been going down because real yields have been going up and people have been taking more risk. Why hold gold and not other more useful commodities or riskier assets in general? Gold going up isn't a good thing. It means something is not going well. Over the last few days Gold didn't go down along with bonds, which is worrying. It is stuck between and uptrend and a downtrend, however it is clear it is currently in a downtrend as it is below all key MAs (50-200-300 DMAs). 6. Oil has had a massive rally and I can't tell whether it is over for now but it could be. Very high oil prices in the current environment wouldn't be ideal, but hopefully because more oil is being produced, not because demand is down. Low oil demand means low growth and bad things in general going on. High oil demand means growth and go things going on. Oil got above the 2019 highs, swept them, retested them and went down quite a bit. It also crossed above the big diagonal downtrend from the 2008 high all the way down here and then came back down. If it closes like this and goes lower, I can't rule out 52$ or even 42$, but if it starts going above 68 it could quickly accelerate higher. 7. RUA is the index that has the top 3000 US stocks, spot. It is just an index and doesn't track futures but spot, so it isn't open 24/5. Stocks are still in an uptrend, which Japanese and European stocks showing quite a bit of strength. We've seen quite a few US stocks do well, but if the top US stocks struggle because of higher rates... there could be a big problem. If bonds start selling off hard, the borrowing costs for many companies will skyrocket. That is clearly a massive issue right now. So is a 20% like the one we had in 2018 possible? Yes it is. Do I think stocks could still go parabolic? Of course, but it might take some extra time to get there. We need bigger actions from central banks and eventually bonds slowing down and go up slowly. For now we could get another 5-10% correction, test the trendline and go higher. Until I see the market close below I think up is more likely, although I am more cautious.
by BitcoinMacro
Carry Trades, Margin Rates and all the FakesFor some strange reason the retail trade still appears to believe that the good old stand-bys are working as carry trades" ( AUDJPY , NZDJPY , GBPJPY , etc.) The fact remains that today, those don't even make the Top 5 of professional traders' (e.g., the industry) preference list. Interest rate differentials combined with existing margin rates make most of the majors crosses a very unappealing proposition as far as carry trades are concerned. Because of this the industry has moved on, quite some time ago. (As is the nature of the present, speculative bubble.) As for the top 5 of the majors, it's mostly about the US Dollar ; 1) USDCHF 2) USDJPY 3) EURUSD 4) NZDCHF (This one is likely to drop a few places, soon.) 5) CADCHF Then, there is the rampant "interest" (i.e, speculation) in all things BRIC vs. G10, for reasons which should be self evident. (Interest rate differentials, capital flows, etc.) I.e., MNX, CNH , BRL , ZAR , TRY versus the EUR, JPY and the USD. Thus, if one happens to be looking for volatility and low-hanging fruit out there, these FX pairs are deserving a fresh look. (They are volatile, though thus, be prepared!) Here is the "Central Bank Score Board"; ------------------------------------------------ - Swiss National Bank -0.75% - Bank of Japan -0.10% - Federal Reserve 0.00%-0.25% - European Central Bank 0.00% - Bank of England 0.10% - Reserve Bank of Australia 0.10% - Bank of Canada 0.25% - Reserve Bank of New Zealand 0.25% - Central Bank of Brazil 2.00% - Reserve Bank of India 4.00% - Reserve Bank of Russian Federation 4.25% - People's Bank of China 4.35%
by Nemo_Confidat