Chart of the day: China eyes offshore
China’s July trade data was disappointing, with exports falling 4.4 per cent and imports dropping a hefty 12.5 per cent in US dollar terms. Concerns that consumption is not replacing the more traditional avenues for economic growth are back. In yuan terms, the data was more muted, prompting a closer look at the currency. Having stalled ahead of January’s high, as expected, we feel it is just a matter of time before another upward attempt to the top of the triangle consolidation takes place. This is because the dollar is no longer overbought against the yuan, momentum remains clearly bullish, moving averages and retracement are supportive, and the candles of 26 weeks ago helped lift the lagging line.
Nicole Elliott is a technical analyst