- The US dollar initially pulled back against the Chinese Yuan, only to turn around and show signs of strength again.
- As we continue to threaten the 7.3 level, this is an area that I think a lot of people will be paying close attention to in the fact that we have rocked back and forth does suggest that perhaps it is going to be a barrier that’s a bit difficult to overtake.
However, it’s obvious that Asian currencies in general are on the back foot, and the Chinese Yuan will be any different. After all, the Chinese Yuan isn’t necessarily the easiest to convert into the open markets, although it’s probably worth noting that it is not a free-flowing currency either.
Top Forex Brokers
Technical Analysis
The pair has been rallying for some time and I don’t think that changes anytime soon. If we do pull back from here, it makes a certain amount of sense that we would see the 50-Day EMA offer support, but that is all the way down at the 7.25 level. Between here and there, I would anticipate a bit of a bounce, and I think that bounce comes into the picture to offer plenty of value for traders willing to get involved. If we can break above the 7.33 level, then I think the market goes looking to the 7.35 level. The market will continue to be noisy, but all things being equal this has a feel of a “buy on the dips” type of market.
In general, I remain bullish of this market, but I also recognize that it does tend to be very choppy, and the People’s Bank of China is heavily influential as it will have a “reference rate” that the currency is allowed to float. Because of this, I think you have to be cautious, but right now it certainly looks like traders are willing to jump in and buy greenbacks, so I think any pullback at this juncture is going to end up being a nice buying opportunity.
Not sure which broker to choose? We've made a list of the best forex brokers for you.