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CHINESE YUAN / U.S. DOLLAR

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230228 - USD/CNY as leading indicator - or not?I am investigating the extent to which USD/CNY is an indicator of future USD moves across the Majors. First, notice on the chart how well Price-Action and Elliot Wave concepts apply to USD/CNY. The levels of polarity chance sit right on the Fionacci retracements. The Breakout Aug 2022, in (A), follows the description of a breakout (Pre-Breakout PA) to perfection. The Breakdown Dec 2022 / resumption of trend, in (D) is beautiful in its simplicity. The top reversal from Oct/Dec last year in (B) is a textbook example of a Head & Shoulders pattern. The top itself (C) does also read as THE top: Long Candle up, Dark cloud Cover, Inside bar, Pin bar and a counter strike bar. Text book Dark Cloud Cover Reversal, in fact you’ll find a chart example in Steve Nison, 'Beyond Candlesticks’, p.80, that looks very similar to this one. (I checked, I did look familiar when I saw it) Double bounce Jan 2023, in (D) respecting S/R levels from 6 months earlier. LAST FRIDAY You remember USD gained across all pairs. Bullish USD means Bearish Stocks. Friday should have been a good day for you guys. It was easy, no? All I needed for Friday was USD/CNY, it’s what I based my decisions on. THE BREAKOUT LAST FRIDAY WAS PRECEDED BY A BRKEAK OUT ON USD/CNY. MEANING THAT (AT LEAST ON THAT OCCASSION) USD/CNY IS A LEADING INDICATOR, maybe just because it's the earliest market to trade on any given day. DOLLAR INDEX (#DXY) vs USD/CNY AS INDICATOR. I have added DXY (in orange) as an overlay. I few things I notice: Most important takeaway; USD/CNY tells you the start of the big move up or down within a day or 2max. USD/CNY is not useful in providing info in ranging DXY markets. May-Aug 2022. DXY is frisky. Jumps down, up, up and down, arriving where it started, 3 months earlier. During this time USD/CNY remains stable. But the breakout is dead-easy to read from the USD/CNY, while DXY at that time was confusing and useless as indicator. I have already explained the top-reversal on USD/CNY above. That is clear. On DXY however, the top is very frisky again, wild swings with a range, half the range of the entire wave down. 1 Feb 2023. Is the bottom of the down-move on DXY. 2 Feb 2023 on USD/CNY. But USD/CNY gives you confirmation with a double bottom, which can be read as being the bottom. Conclusion For now, I suggest you add USD/CNY to your watchlists, and look for USD-pairs that respond well. (JPY and CHF are two) For those USD/CNY will be a useful indicator for timing your USD-trades. One last thing - the spread between the USD/CNY and DXY When the spread becomes too large, USD drops, but DXY drops more. We know CNY is overvalued. Chinese Central Bank manipulates it, since 2015, when USD and CNY de-pegged. But I need to investigate the spreads further.
by UnknownUnicorn39208297
The Chinese yuan is the new world currency.The forecast that will probably come true not in 10 years, but this year, the yuan will begin to become the world's currency. Currently it only accounts for a few percent of world trade, but it will account for tens of percent. In this scenario China must stop devaluing the currency to please its exporters and overseas partners. Create an infrastructure parallel to the SWIFT system. I assume that this will be a digital yuan for international transactions. Whether there will be a correlation with the current fully fiat yuan - I can't say yet.
Short
by IgorFlow
3
The Black Swan Soars on Plague WindsWhat is the Environmental, Social, and Governance effect of 400,000+ excess deaths a day over a month? Internal Chinese government documents suggest over 250 million cases in the first three weeks, across the country in December after COVID-zero protocols were disbanded from increasing social unrest. Others suggest a sitting average across two weeks at 37 million cases a day. Extrapolating the US's statistics onto China, a ~1.1% mortality rate with 10-15% incidence of Long-COVID yields 400 thousand deaths and 30 to 45 million disabled, so far. The image of the dystopian brutality in previous COVID-Zero lockdowns emanating from social media channels that weren't blocked out from government censors revealed the extent a nation would go through in order to prevent what is currently happening. From a humanitarian standpoint, the pain and suffering of the Chinese people during this time is incalculable and irrefutable. Mathematically, these numbers are ideal and optimistic; healthcare in China is as diverse as America's major hospitals vs rural community, except numbers far in excess. Staff, equipment, general education levels, ability to buffer and support - all at drastically reduced levels in a country that has failed to hit reasonable vaccination levels with an ineffective vaccine. Socially, 400 thousand homes a day losing at least someone, and millions more taking a hit to productive members and increasing in burden. Economically, whatever lockdowns shuttered commerce is just the start. Short-term consumerism will be chaotic as essential goods struggle to meet essential needs, on the back of behaviours befitting a scene of crumbling organization. Long-term will suffer as 1+% of the population exits stage right quickly, and the potential tens of millions dealing with a new disability preventing maximum economic output, or even any. Environmentally, the Megatropolis has failed. Early COVID in America was centered on dense-Urban populations, with New York City facing some of the worst numbers resulting in National Guard being called in to medically treat the living and sanitarily remove the dead. China has ten cities bigger than NYC, and 40 more just under to 25+% of the size. High-density environments carry outsized risks in disease transmission, as a single cough reaches far more susceptible hosts for disease progression. Aside from the obvious, previous studies on China's COVID issues with urban environments has revealed serious regulatory failures in high-rise plumbing that enabled aerosolized-COVID from wastewater within apartments to spread across the building. The social unrest and riots in the streets that forced the CCP from COVID-zero saw millions congregating on the street in super-spreader events. Governance, or rather Government, failed. Behaviours by the Chinese government to reduce the likelihood of this specific event, and to reduce total COVID levels across the nation, failed. The Chinese government has failed to prevent a catastrophic-COVID event, and the Chinese people are and will continue to suffer from it. No good deed goes unpunished, which says little for bad deeds done for "good" reasons. Unfavourable and unsupported lockdowns were a necessary evil to give the Chinese government more time to establish preventative measures, medicines, and environments to enable reduced-transmission without preventing social activity. Furthermore, the riots that led to the abandonment of the lockdowns were only stopped by government acquiescence, which means that whatever next step the government chooses to do will be done on the back of an angry populace. Balancing the economic and healthcare needs of the largest nation on Earth is hard enough, doing it on the back of a persistent tract of failures will be a dance. Russia's continued attacks on Ukraine carries a risk of social unrest leading to dissolution of the nation; secluded and deprived regions being scoured for bodies and cannon fodder are increasingly rising up against Putin's regime. While these events carry more risks on the frontline, and reveal themselves with Russian-on-Russian violence in Ukraine, dissatisfaction and anger continues to build as graveyards fill up. China has been unified for millennia, and are made up of diverse regions and peoples that carry this patchwork engrained culturally. Despite moderate runs of anti-individualism, there is little to suggest a greater "falling apart" would happen - but that doesn't mean the Communist party gets to celebrate. China's COVID-surge is just one facet of a nation struggling in the times. Tensions have been rising amid economic issues across the globe, naturally occuring as friction between sovereign's builds in a bipolar environment. An economy built on manufacturing everything else for everyone else is fragile as reshoring begins, and rising tensions between China and regional partners has only accelerated that. China winning an invasion on Taiwan isn't the same as Russia and Ukraine - China's military strength removes most of the guesswork on success, but that success itself would result in greater issues of international cooperation for a country so focused on being the economic center of the world. Bipolar to America's financial center of the world; and this distinction carries the greatest importance for the future. Economic sanctions on Russia elucidated the totality of the situation, China's large stockpiles of other sovereign's government debt and bills is only as good as the willingness of those other sovereign's to respect that debt. If China wants to continue to play any game on the world stage, it will need to continue to play by the greater game's rules. Russia believed it had the strength to break these, to which it failed and will continue to fail until the government ultimately fails. The global property market is popping, with very different effects among the parties. If America's housing crisis can be summarized as too little housing at too high prices, China's is too much housing at too high prices. Recent publications reveal over 90% of Chinese households own a home, with over 20% owning multiple homes. Various sources cite different numbers, but recent data suggests a greater than 40% ownership of 2, and 25% ownership of 3+ homes. Stories of China's "Ghost cities" have been circulating for decades, with several documentaries showcasing intimate portrayals of a government utilizing construction for GDP inflation. This obsession with numbers over reality is one of the greatest strengths China has, because the government does have the ability to create economic realities with those numbers. While most economists might cite wasteful spending on building regional transportation, high speed rail, and decentralized infrastructure across the gigantic nation - this infrastructure will enable diversified and de-localized population spreads with integrated and co-dependent economies. China's surplus on making everything for everyone else underpins a need for external demand. As that demand decays, China needs to build a system that benefits from intranational trade and internal demand. The government fully acknowledges this, CCP economists and strategists have been working on this for some time, but COVID belies the issues interpreting. Medically, the mRNA vaccines provide significant protection against valid-COVID strains, and were made almost immediately post-genomic sequencing of the virus was made public. Peptide vaccines were slower to develop due to technological limitations, but are currently on the market. China failed to produce a nationalized version with similar efficacy, and failed to establish the mRNA technology to enable vaccine production. Scientifically, China relies on knowledge and technology transfer from others; as America and other nations continue their attempts to limit access to next-generation technologies, China's ability to create current-generation goods and services decreases. This is nearly two years of failure in securing and utilizing nascent technologies to prevent catastrophic COVID-surges, amid a top-down directive against foreign vaccines. The ability to accurately forecast in China is done. The Black Swan among black swans has landed, and there are no longer guarantees of specific outcomes. 2022 saw Xi Jinping consolidate power into a blackhole, with the gravity of the times bringing extra pressure to a nation struggling to find a new path forward. Whether the government escapes the pull from their own failures isn't for current debate, as it is the action of the people that give the nation it's power, it's drive, it's ability to move forward. Whatever comes, may 2023 bring peace and health to the world, and to the Chinese people. Selected References: www.ncbi.nlm.nih.gov www.scmp.com www.cnn.com www.bloomberg.com Author's Note Strain mutation will be extremely high given close-proximity of hosts across diverse immunological and pathological backgrounds; i.e. strains will mutate as they attempt to spread across people who have gotten various strains in the past with variable antibody levels and response. It is impossible to guess how various facets of COVID modulate, such as symptoms, but the virus has made significant modifications in RNA stability, replication levels, immune-stealth, evasion, etc. Many nations will and should institute travel bans to limit viral spread across large geographical distances, which will seriously afflict global markets.
Editors' picks
Long
by DoctorFaustus
23
USDCNY Bearish below the 1D MA50A month ago we called the top on the USDCNY: With the price breaking below Fibonacci 4.0, the pair has basically called for an extension of November's downtrend. This will be confirmed if the price fails to close the week above the 1D MA50 (blue trend-line). As you see, on a sample dating back to January 2017, every time the price failed to close above the 1D MA50 (four events), it extended its losses and broke below the 1D MA200 (orange trend-line), approaching the 1W MA100 (red trend-line) and on two occasions breaking (much) lower. A slightly different case is March 2017, when the price did break above the 1D MA50, but eventually collapsed below it a few weeks later. Perhaps the best confirmation for a long-term sell would be when the RSI on the 1W time-frame breaks below its Support level. This happened on all of those cases since 2017. As a result, we have a medium-term target for USDCNY on the 1D MA200. ------------------------------------------------------------------------------- ** Please LIKE 👍, SUBSCRIBE ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support me, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- You may also TELL ME 🙋‍♀️🙋‍♂️ in the comments section which symbol you want me to analyze next and on which time-frame. The one with the most posts will be published tomorrow! 👏🎁 ------------------------------------------------------------------------------- 👇 👇 👇 👇 👇 👇 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
Short
by TradingShot
5
USDCNY Next week will probably top and turn sidewaysThe USDCNY pair has been on a very strong rise since it got detached from the 1D MA50 (blue trend-line) on August 11. The bullish channel resembles that of mid April - mid May, which topped on its 6.0 Fibonacci extension from its previous Support. The RSI is printing a similar sequence that was just before that top. As a result it is a possibility that the pair tops next week around 7.300 and then pulls back to the 4.0 Fib, turning sideways until it tests the 1D MA50 again, where the next long-term trend will be revealed: either a bullish continuation or a closing below it and a new bearish pattern will be introduced. ------------------------------------------------------------------------------- ** Please LIKE 👍, SUBSCRIBE ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support me, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- You may also TELL ME 🙋‍♀️🙋‍♂️ in the comments section which symbol you want me to analyze next and on which time-frame. The one with the most posts will be published tomorrow! 👏🎁 ------------------------------------------------------------------------------- 👇 👇 👇 👇 👇 👇 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
by TradingShot
1
Speculating on CNY .. from a "distance"Looking at the CNY and its highest probable and most immediate index levels that we can theorize and speculate (using fundamentals and reason) the currency reaching in the seemingly distant future. This is one, if not the most fascinating markets and charted data I have ever studied. As the most powerful and fastest growing economy on earth, market performance in China will play increasingly more influential roles in the global marketplace and its participants. As the post-world war II global economy continues its evolution in the early 21st century, I will certainly be keeping my eye on the Juan. On this publishing I am showing the theoretical levels on what would be a full retracement to the .618 of the already completed impulse down from the CNY's all-time high of 8.74. In order for this fibonacci retracement to be properly placed at these levels, the CNY would need to continue the monthly bullish uptrend to the golden pocket zone of around 7.7, where it would then need to break the trend or significantly consolidate. Its not my most traditional, or most immediately useful piece of work, but, hopefully this is interesting to you like it is to me. Happy trading, and good luck!
by Bobbyusesfib
So, I looked at the CNY (Chinese Yuan or Juan) more, and..Check out my most recent publishing(s) referring to this particular exchange rate in the "Related Ideas" section below if your interested in the USDCNY. I took a closer look at my in-depth analysis over the weekend and felt as though it needed some adjustments (additions*) + further complication.. but its for the better.. hear me out. Ive been spending the last month or so, and will be spending as much time as necessary to catch up and become more and more familiar with what's appearing to become an even more disastrous real estate market than what we know to be the worst recorded event (in relativity) in capitalism history. ("the 2008 financial crisis") This event could be worse, simply due to the fact that China is so powerful.. (which is good for us; the money managers!) As a trader, its important to consider the recent upturn regarding political and socioeconomic gossip. IYKYK There is plenty of public and freely available information on how to approach any market using fundamental risk management. Save this, be patient, and ask questions. Happy trading, and good luck!
by Bobbyusesfib