Forex: USD/CNY Slight Bias to the Downside

Very little movement has occurred with this currency pair (US Dollar against Chinese Yuan USD/CNY) in the last week. The market has been moving primarily sideways for more than six weeks.

There has been a very small move into minor resistance at 6.8187 but so far the meaning of that is inconclusive. Until there is a break out from the rectangular price pattern, no clear trend can be identified. There is, however, still a slight bias to the downside.

TECHNICALS


USD/CNY chart as at 13 November 2008 using NextVIEW Advisor

Stochastic – the extreme gyrations of this indicator do not reflect trend, but only the minor up and down price movements within the narrow trading range.

Simple Moving Average (200SMA) – the market has been below this moving average for most of the past fifteen years. Until there is a move above this average, currently around 6.8900, the market should be considered basically to be in a down trend.

R1 – 6.8404
S1- 6.7926

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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.