Chart of the day: Bullish outlook for US dollar-yuan exchange rates
A draft communique seen by Reuters suggests that Group of 20 finance ministers will drop the phrase “refrain from competitive devaluations” and switch to keeping an “open and fair international trading system” at their meeting on March 17-18. Interest in the offshore yuan remains high with very good volumes traded in both January and February. As expected, it has begun to consolidate on either side of the area around 6.89 yuan per US dollar, possibly in a symmetrical triangle. It remains above the first Fibonacci retracement support, momentum is bullish and all aspects of the Ichimoku cloud system remain bullish for the dollar against the yuan. A retest of the record high during the next six weeks remains a strong possibility.
Nicole Elliott is a technical analyst