Chinese Yuan expected to strengthen against the US Dollar

At the present time there is a lower high and a higher low evident in the daily chart. This is at least a reasonable description of a trading range.

My bias remains to the downside, anticipating a strengthening of the RMB against the US dollar.

Since it’s neither prudent nor profitable to hold an opinion against the evidence of price data on the charts, a strong close above R1 (marked on the chart) would require me to adjust my view, at least for the short term.

TECHNICALS


USD/CNY chart as at 16 October 2008 using NextVIEW Advisor

MACD – moving sideways in bearish territory.
Stochastic – down
EMA60 – this exponential moving average has contained most of the recent upside price movement, and is still sloping down.

R1 – resistance at 6.8442
R2 – 6.87
S1 -Nearby support at 6.7737
S2 – (not shown) 6.7474-6.7141

Article and Commentary by Don Schellenberg. Mr Don Schellenberg is Senior Market Strategist of the NextView Group. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.