Quick Profits On The Chinese Yuan (CN¥) ⇨ US Dollar ($) (CNYUSD)

Quick Profits On The Chinese Yuan (CN¥) ⇨ US Dollar ($) (CNYUSD)
China’s yuan firmed slightly against the US dollar ahead of possibly tighter monetary policy at home if US interest rates rise this week.

The market has turned its focus to the Federal Reserve’s two-day policy meeting that starts later on, speculating that a hike in rates there will have a spillover effect on domestic money rates.

He said that if the Fed stands pat on rates, however, there might not be immediate impact on the yuan from a softer dollar, as the market had already priced in a June rate hike in the United States to support the greenback.

The People’s Bank of China set the midpoint rate at 6.7954 per dollar prior to market open, weaker than the previous fix 6.7948.

In the spot market, the yuan opened at 6.7984 per dollar and was changing hands at 6.7970 at midday, 18 pips firmer than the previous late session close but 0.02 per cent softer than the midpoint.

Traders said spot yuan traded in tight ranges in the morning, but trading volumes climbed suggesting that some institutions were taking advantage of tiny price swings to make intraday trades for quick profit.

The daily trading volume totaled $18.122 billion by 0350 GMT, compared with full-day volume of $24.147 billion on Monday.

Overall, the bias in prices is: Sideways.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

By the way, prices are vulnerable to a correction towards 6.85.

The projected upper bound is: 6.82.

The projected lower bound is: 6.77.

The projected closing price is: 6.79.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 24 white candles and 23 black candles for a net of 1 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 63.9930. This is not an overbought or oversold reading. The last signal was a buy 6 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 21.94. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 117 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 -57. This is not a topping or bottoming area. The last signal was a buy 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 21 period(s) ago.

Rex Takasugi – TD Profile

FOREX CNY= closed down -0.001 at 6.797. Volume was 45% below average (neutral) and Bollinger Bands were 186% wider than normal.

Open   High    Low     Close   Volume
6.796   6.798   6.795  6.797   1,172

Technical Outlook
Short Term:                Neutral
Intermediate Term:  Bearish
Long Term:                Bearish

Moving Averages: 10-period   50-period   200-period
Close:                       6.80            6.87             6.84
Volatility:                4                  2                   3
Volume:                  2,659          2,334           2,097

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.

Summary

FOREX CNY= is currently 0.7% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of CNY= (mildly bearish). Our trend forecasting oscillators are currently bearish on CNY= and have had this outlook for the last 17 periods. Our momentum oscillator is currently indicating that CNY= is currently in an oversold condition.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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