USD/CNH set for fresh breakout as growth concerns intensifyThe USD/CNH is definitely worth watching as the recession narrative comes back to the forefront of investors' minds.
The renewed weakness in the yuan has been mirrored in the price action of things like copper and China's stock market, which fell overnight despite US and European indices rallying.
Fears over global growth intensified after China decided to postpone, without giving a reason, the release of its third quarter growth and industrial production figures that were due for publication this Wednesday.
Analysts think that economic growth there has slowed to a new three-decade low of 3.3% compared to 4.9% recorded in the same period a year ago. But the fact that China has delayed the release of the data does not look good and investors are worried that the world’s second largest economy may have performed even poorer than those expectations.
At the same time, the Fed has yet to indicate that it is ready to pivot to a more dovish stance. This is keeping the dollar bid.
The USD/CNH has, in response, started to move higher again. It looks like a breakout above the September high is on the cards, as rates continue to print bullish characteristics.
CNHUSD trade ideas
usdcnhUSD/CNH reached the big 0.7000 level – which was a potential scenario we first floated back in August the 16th. The pair is currently within its seventh consecutive month higher and supported by the divergent policies of the Fed and PBOC. The 2-year spread between US and China’s bond yields are soaring higher and USD/CNH prices are gladly following. With increased speculation that the Fed would not only raise rates by 100bp next week, but also raise them to 5% by March 2023, that comes as no surprise.
And this is despite the PBOC’s attempt to stabilise their currency with cuts to their RRR (reserve requirement ratio) and withdrawing ¥200 billion. Still, were these measures not taken the USD/CNH likely be trading higher, and I’d argue that Beijing likely want a weaker currency anyway to boost growth via exports – much like the BOJ.
The 4-houtr chart remains in a very strong uptrend, and after a daily close above 7.000 yesterday it has now respected that key level as support today. Resistance has been met at 0.7030 (a 76.8% Fibonacci projection from a longer-term bullish triangle), so we’re now waiting to see if it can hold above 7.000 – which is likely a pivotal level over the near-term.
Should break back below 7.000 then bulls could seek bullish setups above the 6.9615 low, whereas a break above 7.0400 assumes bullish continuation and brings 7.1000 into focus.
USDCNH is on a 6-day winning streakThe US will release a series of high-impact economic indicators related to inflation and the labor market during the trading session, which will bring high volatility to major Forex pairs.
The US will release: Consumer Price Index, which is expected to increase from 296.171 to 296.43; a higher figure will be positive for the USD as it suggests high economic activity. They will also release the Inflation Rate YoY, which is expected to drop from 8.3% to 8.1%; higher inflation will be bullish for the USD but will negatively impact the US Stock market.
The US Initial Jobless Claims indicator is expected to increase from 219K to 225K for the first week of October, suggesting that the labor market is finally giving in; however, we have seen surprisingly good numbers for the labor market in recent weeks.
Later in the trading session, China will release the Inflation Rate YoY, which is expected to increase from 2.5% to 2.8%; a higher rate will be positive for the Yuan exchange rate against other currencies.
China will also release the Balance of Trade for September; analysts anticipate an increase from $79.39B to $81B. China is a prominent exporter and has maintained a surplus since 1995; a higher figure than expected will be positive for the Yuan.
USDCNH is on a six-day winning streak; the general trend continues to be upward as the pair is currently trading above the short and long-term moving averages. Our parabolic S A R indicator strengthens the long signals.
The Bollinger bands are still wide and moving upwards, which suggests there will be high volatility and that the pair will continue moving upwards; however, the bands are starting to shrink, which indicates that the pair might enter a consolidation phase in the medium term.
The relative strength index is at 64%, allowing the pair to continue climbing a bit before entering an overbought status. If this happens, there might be a temporary change in the market sentiment.
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This publication does not provide financial advice for traders, and its only purpose is education. Use all the available information from different analysts and develop your own trading strategy. Trading forex and cryptocurrencies is not for everyone. You should only trade with money you can afford to lose. Past performance does not indicate future results.
USDCNH to the Moon (Venezuelan Style)OANDA:USDCNH
It does not look like USDCNH will be seeing levels below 7.0000 soon. With 7 now becoming support I expect this to continue to move in the inflation direction. China is considering devaluing its currency for the first time ever. With Xi Jinping's ZERO-covid policy psychopathically trying to achieve ZERO virus infection rate. It is a living-in-the-dream-world idea.
This is the characteristic of the CCP which is not known for living in reality but only follows its ideologies to an extreme level oppressing every possible solution in exchange for more oppression of public life. They will not be able to save their currency at all. The inefficiency and the ineffective government will continue to be plagued with trouble. They only concern themselves with "face" not substance. Winning is impossible, so they must try to appear as though they are. (propaganda)
Protests in China are an everyday thing now. Citizens are dying of starvation from being locked into their apartments and also heat waves of drought after massive flooding earlier in the year. Office buildings burning, gas pipes exploding, damns collapsing, and bridges and chemical plants blowing up due to misguided regulations add more to the troubles that are stirring up.
Since I am very familiar with their consistent failure I will continue to make money buying USDCNH to infinity. We will see more suicides, mass starvation, and clashes with police in the streets.
I began trading USDCNH a year and a half ago. My long-term target of 7.01 which at the time it was near flat 6 and I thought it will be impossible for it to reach my target and yet here we all are today.
Sentiment: Right now nearly ZERO buyers and nearly 100% of Sellers are in positions around the world. This means the price of USDCNH will head up until all traders give up their short positions and will create even more buying orders don't the other side.
This is how I have traded all year and has been successful and will continue as I take contrarian sides of currency pairs.
Forecast USDCNH#FOREX #USDCNH
As you remember, I wrote that it is time for China to intervene, as our trading system signals a turning point-vibration. The trading system and knowledge of economic processes and dialectical contradictions once again anticipates what will happen in reality a little later.
Bottom line: the price went slightly above the indicated zone with a squeeze. However, the People's Bank of China has started to make verbal interventions so far, as expected:
🇨🇳 The Central Bank of China carried out verbal interventions in the CNY, warning speculators that they will lose money in the long run if they continue to bet against the CNY;
China's state-owned banks have been told to brace for CNY intervention - RTRS;
Yuan is unlikely to continue rapid decline - Chinese state Securities Times;
Where this will lead next: the intervention of the Central Bank of the PRC de facto and their transition to more aggressive rhetoric without any euphemisms. Process started. I still expect an escalation in Taiwan and the South China Sea.
USDCNH -0.92%
The US dollar is losing ground to some currency pairs after the US 10-year treasury Note spiked in the previous trading session. The Chinese Yuan gained 2.44% after reaching a 14-year high yesterday.
The US released Initial Jobless claims this morning, and the result came out at 193K, a better than the expected figure by 22K; analysts anticipated a 215K. The figure is not only better than expected but also better than the previous release, which strengthened the USD against four of the six major currency pairs.
China will release N B S Non-Manufacturing PMI at an early stage of the new trading session. Analysts expect the figure to come out at 52.8, while the previous was 52.6. We could see a minimal improvement, but it is more important that the figure stays above the 50 level, which indicates industry expansion, the release of this economic indicator will create more volatility in the exchange rate of the Chinese Yuan against other currencies, mainly against the USD.
China will also release N B S Manufacturing PMI, which is expected to come out at 49.6 from a previous 49.4. Although we could see the figure improve slightly, if it stays under 50, market participants will interpret it as an industry contraction and are likely to take action.
The USD Index is 17% up this year, and we see very solid numbers in the labor market despite the Fed's efforts to slow down economic growth. It could be hard to beat the dollar this year. Currently, the US stock market negatively correlates with the US dollar.
The pair continues on a general uptrend as the short and long-term moving averages are still below the current price; the pair is retracing, but after the release of high-impact economic indicators, the dollar could resume the rally.
The Bollinger bands are wide and continue moving upwards, suggesting that volatility will continue to be high and that the pair will likely resume the uptrend. Our Parabolic S A R indicator strengthens the long signals.
The relative strength index is recovering from an overbought status, currently at 62%. We could see the pair pull back closer to the support level at 7.061120 before the uptrend resumes.
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This publication does not provide financial advice for traders, and its only purpose is education. Use all the available information from different analysts and develop your own trading strategy. Trading forex and cryptocurrencies is not for everyone. You should only trade with money you can afford to lose. Past performance does not indicate future results.
JICPT| USDCNH on the way to test 7.2Hello everyone. My latest published idea with the title of USDCNH is likely to test 7.01, is absolutely right. Now the upper boundary of the range(7.01) has been conquered. What's next?
On the fundamental side, CNH is expected to be weaken due to the loose monetary policy to support the economy. I think China and Japan are the two major powers in the world keep or lower the interest rate. China's CPI is 2.5%, well below that of US. Also, China's export is losing its momentum. so the weaker CNH will help to maintain its competitive in the market place. However, China aims to make Renminbi the next global currency. So, CNH(offshore Renminbi) is required to be stable to attract foreign investors. So the question is where is the possible level government would step in?
I guess 7.2 is the key level we need to focus on. The level is the previous high created during the pandemic back in 2020.
On the technical side, the range works until it's been firmly penetrated. The upper boundary of the new range is coincided to be 7.2.
Let's see how it approach the key level. What do you think? Give me a like if you're with me.
USDCNHHELLO GUYS THIS MY IDEA 💡ABOUT is nice to see strong volume area....
Where is lot of contract accumulated..
I thing that the Seller from this area will be defend this SHORT position..
and when the price come back to this area, strong SELLER will be push down the market again..
DOWNTREND + Support from the past + Strong volume area is my mainly reason for this short trade..
IF you like my work please like share and follow thanks
TURTLE TRADER 🐢
WAIT FOR BREAKOUTIn the loving memory of my child muffin i present your this analysis ... i hope it would help you to take decision ... ask me any thing in the comment section ...
USD/CNH: Bullish pennant pattern formed – Yuan to fall to 7.20?The US dollar-Chinese yuan pair ( USD/CNH ) has been trading on a bullish pennant pattern since April of this year, and is currently testing the critical 7.00 threshold, which corresponds to the close of July 2020 and 78.6% Fibonacci retracement level (2022 lows to May 2020 highs).
Following the PBoC's decision to reduce Chinese domestic banks' forex reserve requirement ratio by 200 basis points to 6% beginning September 15, the 7.00 mark level may face some selling pressure from the bears. This policy action could in fact free up dollars to be converted into Chinese yuan to sustain the economic slowdown caused by the reinstatement of Covid-19 restrictions. The USD/CNH pullback may find support at 6.89 (1 September lows) or 6.85 (61.8% Fibonacci level).
But if 7.00 is broken, then 7.20 might be next. This target (7.20) represents the height of the flagpole when added to the breakout point and will complete the Fibonacci retracement to the highs of May 2020.
Idea written by Piero Cingari, forex and commodity analyst at Capital.com
USDCNH Trades To Triangle Breakout Targets, What Next?In this update we review the recent price action in the USDCNH and identify the next high probability trading opportunity and price objectives to target
THE HOLY GRAIL 50K PIP50 pips this market went since we forecasted the move. Expect another 50k more as a measured move right up to the double tops liquidity which support the bearish structure of the chart. We’ll be waiting to catch that move n put it away
Let’s see what happens %)
The offshore RMB may be difficult to break 7The offshore RMB may continue to depreciate, but the extent is limited, and it may be difficult to break 7.
Under the expectation of the appreciation of the US dollar, non-US currencies are generally weak against the US dollar, and the offshore RMB has to depreciate. RMB to remain generally "stable and volatile" in past 10 years. The intention of the Chinese central bank to lead the easing of the domestic economic environment is apparent. China's positive foreign trade figures were favorable to the appreciation of the offshore RMB.
The market has now anticipated and priced in Powell's likely hawkish bias at the Jackson Hole Economic Symposium this weekend (25-27 August) from 11 August to 23 August. As a result, the USD index has risen by 4.5% (104.30 - 109.00). In the medium to long term, the author believes that it is unlikely that the offshore RMB will depreciate significantly. The CNH/USD will continue to depreciate for the rest of the year, driven by the rising USD, but it may be more challenging to break 7.0000. CNH/USD may be expected to depreciate with a high probability to the max range of 6.900- 6.9500 in the rest of the year, then it is more likely to resume appreciation to around 6.5750.
USDCNH breakoutPrice broke up this triangle📐 and I think there is chance for run to 6.92 and even higher. Setting BUY LIMIT order to previous range high to catch🎣 the pullback. Resistances along the way
ENTRY : local high @ 6.735
STOPLOSS (SL) : local low @ 6.668
TARGET (TP) : height of the triangle projected from midpoint of the local range (BUY LIMIT - STOPLOSS) @ 6.92
REWARD RISK RATIO (RRR) : 2.8
INVALIDATION : when SL level hit
Check my other stuff in related ideas.
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⚠️Disclaimer: I'm not financial advisor. This is not a financial advice. Do your own due dilingence.
US Dollar Ready to Resume Rise Against the Chinese Yuan?Following a few months of consolidation, the US Dollar seems to be making some upside progress against the Chinese Yuan.
Fundamentally speaking, a hawkish Federal Reserve and dovish People's Bank of China offer upside potential for USD/CNH. This also follows measures from China's government (about 1 trillion Yuan) to bolster the economy.
In response, USD/CNH is trying to confirm a breakout above the May high (6.8376). Key resistance seems to be the midpoint of the Fibonacci extension (6.8833).
Further gains place the focus on the 61.8% and 78.6% levels at 6.9460 and 7.0353 respectively.
Keep a close eye on the 20- and 50-day Simple Moving Averages (SMAs). These could reinstate the upside focus in the event of a turn lower.
FX_IDC:USDCNH
USDCNH Jan 2022 to 14 Aug 2022USDCNH Jan 2022 to 14 Aug 2022
USD/CNH refreshed the highest level since 2022 yesterday, with short-term support focusing on the May high of 6.8375. After the RSI failed to break through 70 again, it is showing signs of divergence (the high point in May and the high point of the year refreshed yesterday), suggesting that the exchange rate may turn down in the short term, and the key support below is the 20-day SMA moving average.
JICPT| USDCNH is likely to test 7.01Hello everyone. USDCNH has been moving sideways for the past 3 months until the weaker-than-expected July economic data released this week. In addition, the unexpected rate cut to MLF gave a boost to the pair.
The offshore Chinese currency fell sharply against the dollar by over 700 bps. Now, it pulled back from the previous high around 6.83.
Technically, the all my moving averages are heading to the upside, with a quick retest of my long key MA. That may indicate that previous high is likely to be penetrated. By the measure move method, the upper range after the breakout is 7.01. The weaker Renminbi can help China's export, offsetting the impact of sluggish domestic demand. Companies and consumers are reluctant to take on more debt amid fresh Covid flare-ups.
What do you think? Give me a like if you're with me.
USDCNH - Dollar is kingFollowing my post on HSI, my focus is also on USDCNH pair. My take is that it is in an upward channel and given the differing monetary policies by the Fed and PBoC, my take is that USD will continue to strengthen. However, we should pay more attention to the Jackson Hole symposium for more insights on the Fed's future rate policies as well as the US labour market which seems to be still red hot.
On the technical front, if the dollar crosses 6.842, there is likely to be greater upside. Else if it closes well below 6.83, then likely to continue the downward trend to the next retracement level. Based on stoch, it appears to be a buying signal but the volume is still weak.
Typical Long USDCNH breakout playUSD tightening policy vs CNH easing policy
Inflation is like an illness, and medicine needs to be tailored to the specific problem. Both countries policies are deployed to aid individual domestic economy. And right now, the Fed has no control over the main driver of rising prices, however data suggest that domestic economy allows for Fed to press on tightening policies while closely monitoring signs of industrial recession. On the other hand, China is behind inflation and GDP target, and PBOC has reiterate on easing monetary policies to focus on lowering cost of covid controls while stimulating effective demands. We expect to see more fiscal aid coming from Chinese government in second half 2022 to support economic growth.
Upcoming U.S PMI and CPI data will give more colors to dollar strength, with stronger data pointing to dollar strengthening together with more liquidity assistance by PBOC, we are likely to see short term USDCNH strengthening towards 6.9x over the next few months; in line with forward premium rate follow by USDCNH retracement in late 2022 due to peak inflation and China domestic recovery leading the economy.
We expect the release of China’s fiscal policy to be the trigger for this possible upcoming breakout of USDCNH, with more injected liquidity into the system that weakens RMB. While dollar side movement had been somewhat priced for 75bps next Fed meeting together with projected Fed Dot Plot, the remaining moving factor ceteris paribus shall fall on RMB side of story.
