Chart of the day: Peak triangle
The exchange rate between the offshore yuan and the US dollar has been in consolidation mode throughout this year. In fact, it has been mapping out a symmetrical triangle and we have now met its apex. This is unusual in that more often than not prices break out of this type of pattern when they get about two-thirds of the way through. Interestingly volume has remained high since January, again unusual considering the limited price moves, and historical volatility is one standard deviation below the long-term mean. Despite messy moving averages, trend line and Ichimoku cloud support ought to lift the market, taking us clear of the triangle’s top edge to retest the record high at 6.987.
Nicole Elliott is a technical analyst