Chart of the day: Rally hopes for yuan
Good volume was seen over the past fortnight as the yuan broke trend-line support and strengthened against the US dollar suddenly. International investors were somewhat rattled but we believe what we have seen is a proper correction of the move to yuan weakness that started early last year. It takes the form of an A, B, C-type correction where C is exactly the same height as A and which came to a juddering halt at Fibonacci and 50 per cent retracement support. With the yuan more oversold than it has been in four years yet bearish momentum not as strong as in January, we expect the move to stabilise over the coming week, then prices will rally towards this year’s high.
Nicole Elliott is a technical analyst