Chart of the day: Yuan on sharp post-holiday move
Catching up with moves we highlighted earlier in the offshore yuan, the onshore exchange rate burst higher this week after consolidating in a neat little symmetrical triangle since July. This has brought the spread between the two back into line and taken its value against the US dollar to its weakest since September 2010. We are now back above trend-line support and have added to the series of big red bullish candles that have dominated the step-like moves over the past year or so. By next week, we think the exchange rate should hit 6.7325 or maybe 6.75. Late this year, we favour an attack on very major long-term resistance between 6.8175 and 6.89.
Nicole Elliott is a technical analyst