USDCHN & a Dose of RealityWill the CHN continue to weaken again the USD?
Looking at charts and looking at reality go hand-in-hand as professional currency traders. Unless you own a currency business dealing in money-exchange maybe trading the RMB (USDCHN) may not be a good option.
Here is a dose of reality:
It is not a free-floating currency. Therefore, it is ridiculous for traders to rely on technical analysis alone to make financial decisions.
There will be other means to profit from the RMB that is not necessarily broker-retail trader oriented. Most of the time a retail trader will pay a swap (depending on the broker). One must do a lot of reading and gleaning into global economics, national balance sheets and a country's currency policy.
Technical:
There is a possibility that USDCHN could spike to 7.30, just as it spiked in 2015; a time where speculated holding CHN bailed out due to a sudden announcement concerning new policy on Chinese exchange rate governance. Speculating became an expensive endeavor multiple times over, and to avoid the swap the day the announcement came, many ran away. Looking at the current trend, it is possible that it will continue in the same direction.
Forecast:
If the price of USDCHN falls back down to 7.06, then cancel this forecast to 7.30.
