Chart of the day: Yuan creeps up the cloud
Fibonacci 38.2 per cent retracement support at 6.488 coupled with a large, rising Ichimoku cloud have helped the US dollar strengthen gradually against the yuan over the past week. Better volume suggests this is the start to a process of filling the gap created over the Lunar New Year holiday. This will be filled when we reach 6.5635, the low on February 4, and might be achievable by early next month if the cloud continues to edge things higher. Longer term, this month’s dip to 6.487 is seen as another small correction in a series of bigger steps to weaken the yuan starting in early 2014. Pencil in a rate up to 6.66 for investment calculations.
Nicole Elliott is a technical analyst