The Chinese yuan is on the brink of a major break

Technical Analysis

Author: Adam Button | usdcnh

Yuan threatens long-term low

Yuan threatens long-term low

USD/CNH today matched the September high at precisely 7.1965.

Given the dynamic with China re-opening, you would expect the yuan to be stronger but it's not. The latest leg is no-doubt related to Hong Kong and potential sanctions and that's partly natural but it could also be China sending a warning signal to the US.

Technical analysis on a chart like this is a bit of a canard because it's manipulated. It's not like there's going to be some kind of runaway breakout like we saw in USD/CAD yesterday. There's a daily trading range and it's not going to suddenly break.

At the same time, allowing it to rise above 7.20 would be a powerful signal from Beijing.

No one has forgotten the August yuan freakout from 2015.


See here for global coronavirus case data
By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose