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USDCNH trade ideas

Just a quick note on the outlook for Chinese yuan futures...Exploring the "Condor" : A Look at the Chinese Yuan Futures In the realm of option trading, the term "Condor" refers not to a bird of prey, but to an intricate options strategy known for its non-directional nature. This strategy, aptly named after the wide-winged condor, involves positioning four options at once, aiming to profit from low volatility in the underlying asset. The essence of the Condor strategy lies in its ability to limit both gains and losses, creating a balanced risk-reward scenario for traders who anticipate movement and price consolidation before expiration date in certain market range. Recently, a significant portfolio was recorded on the CME exchange, with an expiration date set for October 4, 2024. This portfolio is noteworthy not only for its size but also for the expectations of its owner. The belief is that the price of the Chinese yuan futures will hover between 7.25 and 7.45, a range. The implications of this portfolio are manifold. For one, it reflects a sentiment that could influence other traders' strategies and market expectations. Additionally, it highlights the importance of understanding options strategies like the Condor, which can be pivotal in navigating the Forex market, especially when dealing with currencies like the Chinese yuan. As we look ahead, we will undoubtedly keep a close eye on this portfolio, analyzing its performance from the yuan's impact. Forex Traders might (better say "should") consider this a bellwether for future movements, making it a focal point for those looking to gauge market sentiment.
Long
by ClashChartsTeam
USD/CNH: BofA’s Caution, JPM’s WarningsUSD/CNH: BofA’s Caution, JPM’s Warnings Bank of America (BofA) has expressed caution about betting against the US dollar in the face of recent improvements in sentiment towards China's economic policy stimulus. Recent policy actions by China have sparked optimism, leading to a weakening of the USD. However, BofA advises against making hasty financial moves based on these developments alone. BofA believes that the effectiveness of Chinese Economic policies in stimulating significant new economic activity remains uncertain. Investors are encouraged to wait for more definitive signs of a sustained recovery in China's credit and property sectors before making significant currency moves. Just last month, BofA expressed a bearish outlook on several Asian currencies, including the Chinese yuan, South Korean won, Taiwan dollar, Thai baht, and Vietnamese dong. BofA anticipated sustained depreciation pressures on the yuan into the second half of the year due to several factors particularly due to the delayed easing by the Federal Reserve. On the other side, Jamie Dimon, the CEO of JPMorgan Chase, has been continuing his warnings at the JPMorgan Global China Summit in Shanghai. Dimon suggested that the chance of stagflation in the US—a period of stagnant economic growth combined with high inflation—is higher than most people think. Last week, he did not rule out the possibility of a hard landing for the US economy.
by BlackBull_Markets
What To Watch Across Markets This Week: 6th May 2024- The U.S. Dollar Index witnesses 1% decline - RBA expected to maintain rates for longer - BOE likelihood of rate cuts rises - Release of key inflation indicators in China: CPI and PPI Last Week's Major Events Last week, the U.S. Dollar witnessed a decline of approximately 1%. The move came as a result of multiple factors explained below. On Wednesday, May 1, the Federal Reserve decided to maintain interest rates at 5.50%. This was followed by the FOMC Press Conference, during which Fed Chair Jerome Powell mentioned the central bank's cautious stance on interest rate cuts. Powell emphasized the importance of gaining greater confidence that inflation is moving sustainably towards the 2% mark before considering any adjustments to monetary policy. Moreover, the pivotal role of key U.S. economic metrics in shaping the Fed’s future interest rate path was highlighted. On Friday, markets saw the release of major U.S. labor data, including the Non-farm Employment Change (NFP) and the Unemployment Rate. The NFP figure fell short of expectations, with a result of 175K jobs added, marking the lowest figure since December 8, 2023, against a forecast of 238K. This drop signaled weakness in employment growth. At the same time, the unemployment rate figure surpassed expectations hitting 3.9% compared to the projected 3.8%, indicating a higher-than-anticipated proportion of unemployed individuals. The combined impact of these developments on market sentiment weighed heavily on the U.S. Dollar, contributing to its recent decline. Upcoming Major Events Reserve Bank of Australia Cash Rate The Reserve Bank of Australia (RBA) is scheduled to release its Cash Rate on Tuesday, May 7, 2024, at 8:30 AM (Dubai Time). The market anticipates the rate to remain unchanged at 4.35%. If the reading aligns with forecasts, this will mark the fifth consecutive period of maintaining the rate at this level, representing its highest point. The RBA is expected to hold its key interest rate at this level to manage inflationary pressures, which are driven by a rise in employment conditions. Bank of England Official Bank Rate The Bank of England (BOE) is scheduled to release its Official Bank rate on Thursday, May 9, 2024, at 3:00 PM (Dubai Time). The market anticipates the rate to remain at 5.25%, a level maintained since November 2, 2023. Governor Andrew Bailey emphasized that price pressures are heading in a favorable direction. Notably, the Consumer Price Index (CPI) declined from 3.4% in March to 3.2% in April, with expectations of further declines. This raises expectations of rate cuts in the coming months, with September emerging as a probable starting point. China Inflation On Saturday, May 25, markets are expecting the release of major inflation figures in China, such as the Consumer Price Index (CPI) and the Producer Price Index (PPI) at 5:30 AM (Dubai Time). China’s CPI is projected to hold steady at 0.1%, indicating a concerning difference from the desired 2% target level. While PPI is expected to rise from -2.8% to -2.3%, signaling a positive trend. This increase suggests that producers are currently facing higher costs, potentially predicting future price hikes for consumers. Such a scenario could translate into a rise in the next CPI reading. The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI. Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.
by CFI
1
Technical Analysis of USD/CNHAs we delve into the technical landscape of USD/CNH, it's imperative to highlight several key indicators, patterns, and price actions that provide a comprehensive view of the currency pair's current and potential future movements. The latest candlestick formations reveal a pronounced fluctuation with a minor upward bias, closing at 7.23310 CNH. This aligns with the Ichimoku cloud analysis, indicating potential volatility ahead. Notably, the Tenkan-sen (Conversion Line) stands at 7.224270, reflecting short-term price averages, while the Kijun-sen (Base Line) at the same value suggests equilibrium in market sentiment. The Ichimoku Cloud, a multi-faceted indicator, is currently demonstrating a slight bearish tendency with the price action hovering around the cloud's upper boundary. The Senkou Span A (Leading Span A) and Senkou Span B (Leading Span B) form a cloud indicating future resistance levels. Should the price sustain above this cloud, a bullish breakout could be anticipated, potentially targeting the 7.2500 - 7.2600 range. Relative Strength Index (RSI): Positioned at 48.96, RSI suggests a neutral momentum, neither overbought nor oversold. Stochastic Oscillator: With %K at 57.38, it shows mid-level momentum, implying consolidation. MACD (Moving Average Convergence Divergence): The MACD level at -0.005428 reflects slight bearish momentum, signaling potential short-term correction. Moving Averages Short-term (10 periods): Both Exponential and Simple Moving Averages (EMA and SMA) suggest a 'Buy' at values around 7.2284 and 7.2281 respectively. Mid-term (20, 30, 50 periods): Display a bearish sentiment with Sell signals across EMA and SMA, indicating a resistance around 7.2346 to 7.2418. Long-term (100, 200 periods): Indicate a bullish outlook with Buy signals, suggesting strong support at approximately 7.2225 to 7.2100. Primary Pivot (P): Positioned at 7.255817, it serves as a central reference point. Support Levels: S1: 7.228703 S2: 7.203987 S3: 7.152157 Resistance Levels: R1: 7.280533 R2: 7.307647 R3: 7.359477 Given the current technical indicators and market sentiment, the following trade strategies are recommended: Long Position Entry Point: Above 7.2400 Target: 7.2600 - 7.2750 Stop Loss: 7.2200 Rationale: Enter a long position if the price breaks above the Ichimoku cloud, confirming a bullish trend continuation. Short Position Entry Point: Below 7.2200 Target: 7.2000 - 7.1850 Stop Loss: 7.2350 Rationale: Consider shorting if the price dips below the Tenkan-sen (Conversion Line), indicating a bearish trend reversal. In conclusion, USD/CNH is currently at a pivotal point with indicators showing mixed signals. Traders should closely monitor price movements around the Ichimoku cloud and the identified support and resistance levels. A breakout above 7.2400 may signal a bullish trend, while a drop below 7.2200 could lead to bearish momentum. Stay vigilant for news that could impact market sentiment and adjust your positions accordingly.
by AxiomEx
Time for a new war conflict ? Hello! I think this rally on USDCNH is going to be incredible. We must wait for a confirmation 1D candle close above the level. I think the main target will be at 8.00. 8 is a lucky number in the East. Be patient, and protect your deposit. Unfortunately, there has been a regularity for the last 3 years that new highs in currencies are connected with a war or conflict that appears after the market changes its structure. (USDUAH, USDRUB, USDILS) I really hope that this time is different....
Long
by ego1smo
Divergence here, divergence thereFundamentals & Sentiment USD: The sentiment has been bullish for a while as US CPI remains sticky. As the dollar gained strength. However, it became overpopulated with buyers, as evident from CFTC reports. So, it should take some trigger for those buyers to start covering their longs - a good potential for dollar downside. The CESI differential for USDCNH has been forming a decent divergence since February. CNH: The economic data came out pretty mixed this morning. It seems the market focused more on slacking Industrial Production YoY and Retail Sales YoY as ChinaA50 closed the session with a sharp recovery, viewing the miss in data as another reason for stimulus from PBoC. Technical & Other - According to seasonals DXY should stay flat for the next 3 weeks Setup: S(RTF) Setup timeframe: 4h Trigger: 15m Medium-term: Sideways Long-term: Uptrend Min target: range boundary Risk: 0.14% (0.5R<) Entry: Market
Short
by Cherry94
5
Dollar-yuan could continue up but breakout questionableUSDCNH covered about half of last Friday’s spike on Monday and has continued to gain since. Volatility increased significantly since the end of last week, but it’s still unclear whether it’ll continue at similar levels or perhaps decline somewhat over the next few sessions. Either way, the uptrend is likely to remain active unless there’s a significant intervention by the PBoC or sentiment shifts notably. The price is above all of the moving averages and in or very close to overbought based on Bollinger Bands and the slow stochastic. ¥7.30 seems to be an obvious medium-term target, being a round number and the area of mid-November 2023’s high. Beyond that, ¥7.35 is the area of the all-time high which probably won’t be broken for some time without a clear fundamental catalyst even if the uptrend continues. There’s no very clear area of static support on this chart. ¥7.20 is a possibility based on the longest tails of last month’s periods, but it’s pretty vague. The 200 SMA might be an important dynamic support in the next few days, though. The focus next week is on Friday’s NFP after Chinese PMIs on Sunday and Monday. This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.
by Michael_Stark_Exness
A stronger yuan could spell trouble for USD/JPYA downtrend has formed on USD/CNH since it failed to retest the 2022 high in September. Since then, a lower high, aggressive selloff and a bearish continuation pattern (rising wedge) has formed on the daily chart. The rising wedge projects a downside target towards the cycle lows ~7.1. If the yuan continues to depreciated (lower USD/CNH), it could prompt other Asian currencies such as the Japanese yen to also depreciate, in order to remain competitive with trade. And as USD/JPY is approaching 152 - a level it failed to test due to BOJ intervention (and subsequent concerns of another intervention) - there's a reasonable chance that USD/JPY may struggle to break above 152. For now, USD/CNH looks ripe for a move lower given the double top / rising wedge around the 50% retracement level, and bearish momentum picking up. Bears could have a stop above the cycle highs and target the lows around 7.1. But if the Fed begin to drop dovish clues further out, it could also break below 7.1 and head for 7.0.
Short
by CityIndex
CNY! Happy Chinese New Year! PEPPERSTONE:USDCNH Oh, I cannot contain my excitement for this year's Chinese New Year of "Dragon"! 🐉 I mean, who wouldn't be absolutely thrilled to experience the exact same joyous celebrations as last year? And guess what? The depreciation trend of CNY? Oh, it's not going to miraculously reverse itself, not a chance! It's almost as if the Chinese government's awe-inspiring market manipulation is gracefully reaching its magnificent climax. And of course, we can all look forward to those enchanting SWAP contracts being wrapped up right on schedule after Chinese New Year. It has become such a charmingly predictable tradition, hasn't it? Like clockwork, year after year. 🙃 Now, if I gaze into my mystical crystal ball, I foresee a breathtaking future for the Chinese New Year. In the short term, hold onto your hats as the price pirouettes within the thrilling range of 7.21 and 7.17. 🧐 But wait, there's more! In the mid term, it will be up to 7.36, the peak in last year. Long term, prepare yourselves for a heart-stopping ascent to the dizzying heights of 7.78 to 7.81.🧐 Of course, we couldn't possibly fathom it going any higher than that. Why, you ask? Well, it's an absolute enigma why the mother country would ever contemplate lowering the rate of the son, especially when the HKDUSD stands at a jaw-dropping 7.8. It's like an intricate puzzle wrapped in a perplexing riddle, don't you think? 🤭 Yes, the macroeconomic world is teetering on the edge of its seat, eagerly awaiting the news that will come to the rescue of the oh-so-precious property market! I mean, what else could possibly save the day? Whispers and rumors abound about lower interest rates, an astonishing metamorphosis of the 5% public housing policies into a mind-boggling 30%, and let's not forget the grand abolishment of Xi's policy, "house is for living but not for making money". 🤭 Oh, but that's not all! Hold onto your hats as only newly planned developments are bestowed the privilege of borrowing money. Isn't it just splendid? But wait, there's more excitement brewing! Brace yourselves as the government magnanimously increases their securing guarantee for property lending. 🍒 Can you even begin to fathom the magnitude of this? We're talking trillions upon trillions of USD equivalent CNY being injected into the market. It's like a magical elixir that will undoubtedly solve all the property market woes. What could possibly go wrong under Xi's visionary policy? 😛 Ladies and gentlemen, get ready for a spectacular show this year. It's going to be one for the books! What are we waiting for? Wish all luck with you. HAPPY LUNAR NEW YEAR! 😛
Long
by RedCranePunch