Chart of the day: Looking for a yuan burst
Like many major currencies, the onshore yuan has appreciated against the US dollar since January last year. While it is not leading this large pack – which was the euro, with a 16 per cent increase – or a laggard like the kiwi, the Swiss franc and the yen with 4 per cent gains, it is somewhere in the middle, having risen 8 per cent. Appreciation accelerated significantly on this year’s break below the large cloud and the lagging line’s slide through its thin part. On Friday, it managed the strongest weekly close since December 2015, an important break confirmed by the dollar index, which settled last week at its lowest point since January 2015. Expect the move to accelerate to 6.38 per dollar where some consolidation might occur, and then further to 6.32.
Nicole Elliott is a technical analyst