China’s yuan weakened against the US dollar after a softer official fixing on Monday, snapping the currency’s four-day winning streak, while the launch of a bond trading scheme between China and Hong Kong had little impact on the market.
The “Bond Connect” programme between China and Hong Kong kicked off on Monday, linking China’s US$9 trillion bond market with overseas investors. But the launch had little immediate impact although some analysts said the programme would offer support for the Chinese currency in the long run.
The People’s Bank of China set the midpoint rate at 6.7772 per US dollar prior to market open, weaker than the previous fix at 6.7744.
Monday’s fixing, the first weakening since last Wednesday, has been lifted by as much as 548 pips in the past three sessions.
Overall, the bias in prices is: Sideways.
Short term: Prices are stalling.
Intermediate term: Prices are ranging.
The projected upper bound is: 6.82.
The projected lower bound is: 6.76.
The projected closing price is: 6.79.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 21 black candles for a net of 5 white candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with FOREX CNY=). It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 24.6570. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 35.13. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 12 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -96. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.
Rex Takasugi – TD Profile
FOREX CNY= closed up 0.008 at 6.787. Volume was 80% below average (consolidating) and Bollinger Bands were 14% wider than normal.
Open High Low Close Volume
6.776 6.790 6.776 6.787 453
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 6.81 6.85 6.85
Volatility: 3 3 3
Volume: 2,551 2,186 2,118
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX CNY= is currently 1.0% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of CNY= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on CNY= and have had this outlook for the last 31 periods.
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