A big falling wedge:
On long term monthly chart the Chinese Yuan is moving in a falling wedg. And this is considered as a reversal pattern among the traders community. As this is the long term monthly chart and signals and patterns are more firmed on long term charts, therefore there are more chances that it will follow the reversal behavior of . At this time the price line of Yuan is at the resistance of . But this time it will be difficult for the priceline to drop up to the support of this . Later this article you will see that strong reasons why the Chinese Yuan will not reach at the support.
Down channel and synchronized movement with indicators and EMAs:
On weekly chart the priceline can be seen moving within a and the movement within this channel is very much synchronized with the and Momentum indicators. If you take a closer look at the chart then you will notice that whenever the price line reaches and the support and the gives bull cross and momentum starts turning then price action takes and reaches up to the resistance of the channel. But this time the priceline of Yuan is almost at the center of the channel and has entered in over sold zone and has given bull cross. And the is also changed from strong to weak . Therefore there are more chances that the price action will not move more down to reach the support of the channel. And if the Chinese Yuan will be moved up from here then the 10 can also cross up 21 and this bull cross between the two exponential moving averages can lift the price action more up that can lead to the breakout from this channel.
A formation is cancelling the move of Head & Shoulder:
On the weekly chart the price action has formed a Head and Shoulder pattern.The formation of this pattern was started from the September 2019. Now the priceline has crossed down the neckline of the shoulder and reached at $0.1395 support. Now the price action is likely to form a formation that can cancel the rally that was started due to this H & S pattern.
A BAT formation:
On the same weekly chart the price action of Chinese Yuan has completed the formation of and entered in the potential reversal zone. Now we have seen that the different indicators on the weekly chart has given signals and after formation of Head and Shoulder the priceline is likely to form a for reversal and finally the price action has also formed a . And at this time it is in PRZ level. Therefore All indicators and patterns are giving strong signal that Chinese Yuan has completed the setup for reversal. And it can start the rally at any time.
On the long term signals and patterns are in favor of bulls rather in favor of bears, however the stop loss is must. In this trade we can set the maximum extent of the potential reversal zone as our stop loss.