USDCNH is in mark-up phase
The above chart chart shows daily price action. The USDCNH is in a mark-up phase. This phase is typically defined by a bullish EMA formation. The green 5-day EMA > the orange 13-day EMA > the black 34-day EMA. The RSI(9) is above the 50 level and indicative of an underlying bullish momentum (blue rectangle).
This is not surprising given that China’s central bank has cut the reserve requirement ratios for most commercial bank in order to inject liquidity into the economy. This is, of course, a loosening policy despite any Chinese rhetoric (and the US’s Fed is pursuing a tightening policy at the same time). Thus, over the next few months, we expect a challenge on the CNH7.00 level and a likely capitulation by that level.
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