Chart of the day: A little thought for onshore yuan
September’s daily and monthly hammer candles of the yuan marked a key interim low, as we pointed out in this column. Over the summer, volume and observed volatility have increased steadily as investors revise their outlook for the currency. The rally from 6.435 yuan was interrupted by the National Day holiday, which you can see as five consecutive days with no range, as per conventional chart construction. This week, for the first time in months, we have a candle that has broken above the top of the descending Ichimoku cloud. Helped higher by the bullish moving averages, once the lagging line breaks above the first retracement resistance, expect a sudden burst up to the next resistance at 6.70 yuan.
Nicole Elliott is a technical analyst