USDCNH - Inverse H&S
Inverse H&S taking it towards 6.8000/6.90000 areas
A break above for further confirmation.
Smaller term we could go test 200 EMA - If we break below 6.7 expect to re-test of the lows.
Don't forget to trade your OWN plan!
Trade Journal
Zooming out to the monthly CNHUSD which represents offshore yuan, we have clearly had an exit from the downtrend that has been in place for close to a decade. The big question is, what's next? Right now, I'm seeing the CNH drop out of a rising wedge to potentially retest the downtrend and/or the 72/89 EMA cloud. I've drawn out my best guess on what a retest would...
Monthly chart so much more macro. Theoretically, the way this could play out is that it falls out of the rising wedge to retest the 72/89 EMA cloud. After that, its make or break on falling back in line with the broader downward channel or to send it and bounce off that EMA cloud. The interesting note is the implications of what a bounce off the EMA cloud means......
The strength of the Chinese Yuan and equity markets appears to be correlated due to the Chinese's increased trade presence and credit expansion. If price action continues to push below the 200 day EMA we could be likely looking at a bear market.
Could the dollar milkshake theory prove to be correct?
Only time will tell. (Dramatic music engage)
Here the Euro view on the strength of the Yuan. The Euro is fairing quite a bit better then the US Dollar against the Yuan.
Still the flaming dragon is in the air ;)
The Yuan has clearly outpaced the US dollar . Over 8.5% increase in value vs. the USD since the pandemic.
The Euro is also gaining on the USD.
A lot of central bank games going on so it is very difficult to predict where the Yuan will go and if China will be able to sustain its current track.
China in my view will sustain and an 8% in value vs. the US dollar is...
🔸 China Macro Flows 🔸
The point of this configuration is that CNH is influencing the currency, equity and commodity board that can be seen in AUDUSD, NZDUSD, OIL, Gold and everything in-between...USD's cannot make any use of the Yuan devaluation and this has been a threat ever since Saudi unlocked the CNY oil contract.
For those tracking the Long-term Macro...
A major breakdown ahead of the open as markets catch up to the virus disruptions. AUD and global trade are set to suffer for sometime, it will take a brave man to step against this flow.
On the monetary side, RBA tee'd up a rate cut in April with another in Q3 on the cards. Housing has already done the heavy lifting, will need A LOT more help from elsewhere to...
The pattern is a bit unclear, but because the RR is so great i am taking the risk here. Starting small and increasing on the break of the yellow zone. Think we might make a lower high on the daily, so it could potentially drop a lot coming weeks. Making the RR enormous, which makes it worth the risk for me. I am using the stop loss, but in case we move only...
