Chart of the day: Offshore yuan weak over the week
An interesting week for the offshore yuan as prices looked down only to close towards the top of the weekly range. This is known as a hammer or hanging man candle formation, both of which often herald a change in trend. Good volume on the move yet historical volatility is almost at this year’s low, plus the US dollar is not overbought on the RSI, which all conflict with the message from the candle. Bullish momentum increased last week while all aspects of the Ichimoku cloud chart system remain bullish. The currency is setting up for a test of the top of triangle consolidation by mid-month.
Nicole Elliott is a technical analyst