Analysis of US Dollary against Chinese Yuan (USD/CNY)

Resistance has appeared on the chart exactly where expected. The market has been unable to close above the resistance area (R1 on the chart), that we’ve discussed in this column previously.

Another effort to close above R1 is not out of the question, but further strengthening of the RMB is far more likely in the near term.

A close below 6.8406 will confirm this suspicion. Beyond that the next level of support is around 6.8200.


Daily USD/CNY chart as at 21 August 2008, using NextVIEW Advisor

TECHNICALS

NextView RSI – quite neutral at the 50 level.
R1- 6.8635
S1 – 6.8200
S2 – 6.8004

A retest of the short term rising trend line is possible, however the chart pattern suggests that a down move in the market will happen soon.

Analysis and Commentary by Don Schellenberg