Chart of the day: Tide turns for US dollar
After basing at 6.04 in January 2014, the US dollar’s fate turned against the yuan, appreciating in steady steps so that our next target at 6.7255 (mentioned almost a month ago) looks within reach. This would then put it within spitting distance of 6.833 where the second wave of dollar devaluation started in June 2010. Throughout this major rally, the MACD and momentum have been strongly bullish and volumes have picked up this year, as had observed volatility, as many attempt to ride this secular wave. These suggest a slower but steady rally over the summer – on declining volatility – to our targets. Fibonacci retracement resistance at 6.90 is unlikely to yield easily.
Nicole Elliott is a technical analyst