I am LONG the USD/CNH for the following reasons:
In the current currency war, China's focus is on maintaining the competitiveness of its export goods vs. other exporting merchantile nations around the region, e.g., Japan, Korea et. al. In a deflationary environment, with currency depreciation happening across the region, either through intervention or otherwise, China will be pressured to keep its currency competitive enough similarly through depreciation.
On the other side of the trade, the strong USD is the safe-haven currency and will continue to be so - no matter whether this is ideological right or not. This adds the supplementary fuel to the equation (perhaps the primary).
Consolidation seen at the 6.268 level which is the previous top in April '14 and also the .618 Fib Extension Level. I see this pair breaking out towards the upside, targeting a completion of .
The pair is trading close to its channel floor and being a trend-follower, I am speculating that the pair will not break below the channel floor and instead move towards the upsloping channel ceiling.
Stop loss is placed below the key lows at 6.2675. I will advise when I move stop loss to breakeven in the event I do.
Trade safe, I will risk 1% of my capital on this trade and I suggest you do the same.
Check out my performance record of all published trades on TradingView: http://tinyurl.com/klkd2vr
Update - 18 Mar 2015: Trade stopped