Forex: USD/CNY remain flat, breakout expected soon

This currency pair has moved almost in a flat line for 14 weeks, as seen in the weekly chart of USDCNY.

Although there have been a couple of spikes below the lower horizontal line on the chart, price has retreated within the narrow trading range.

Lower time frame charts such as daily and hourly do not provide much more useful information about the most probable break out direction from the narrow range.

For the last eight weeks the trading range has become even more narrow, suggesting that a break out will most probably occur soon.


USD/CNY chart as at 27 November 2008 using NextVIEW Advisor

TECHNICALS

R1 – 6.8406
R2 – 6.8702
S1 – 6.8046
S2 – 7.7480

The long term trend is still down, until proven otherwise.
SMA 200 – above price and sloping down at approximately 7.6770 (not shown on the chart).

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