darcsherry

USDCNH | Perspective for the new week | Follow-up

Short
FX:USDCNH   U.S. Dollar/Chinese Yuan
We saw the price decline and move over 1,000pips in our direction since my last publication before the rally began during last week trading session (see link below for reference purposes). Despite the general perception that the USD is on the verge of a rally due to the sudden & rapid rise that appears to be running ahead of itself during last week trading session, I am of the opinion that we are at a juncture in the market where the structure/pattern is "screaming" risk of further decline for the Greenback in the coming week(s). Even though there is room for a possible rally into the major Supply area @ Y6.5100 area, my bias still remains Bearish!

Tendency: Downtrend ( Bearish )
Structure: Harmonic Pattern (AB = CD) | Breakdown | Supply & Demand
Observation: i. Since the beginning of the year (2021), Buyers have found it difficult to break the Y6.51000 barrier thereby leaving clues of strong selling pressure at this zone.
ii. Continuous rejection of the Y6.51000 area followed by a complete Breakdown of Key level (Y6.4600/6.4400) at the beginning of the month (Feb 2021) is a sign emphasizing the strength of sellers.
iii. I am of the opinion that the rally that began on the 15th Feb 2021 is a Correction of the Impulse leg AB (expressed on the chart).
iv. Last week trading session saw price close at Y6.4600 area - exactly 61.8% retracement of AB with the possibility of extending into the Major Supply zone @ 78.6% retracement (appearing to be a rejection of key level) before the decline begins.
v. The setup evolving at this juncture might transpose into ABCD pattern parameters explained below;
a. Leg A-to-B is expected to be in harmony with the potential C-to-D leg.
b. The B- to-C leg is currently hovering at 61.8% (with a possible 78.6% in the future) Fibonacci retracement of the A-to-B leg.
c. The C-to-D leg is expected to fall within 127.2 - 1.414% Fib. ext. of the A-to-B move.
vi. It is hereby required that we become patient and wait for a strong Reversal pattern on lower time frames for confirmations... Best of luck and Trade consciously! :)
Trading plan: SELL confirmation with a minimum potential profit of 1,000 pips.
Risk/Reward: 1:3
Potential Duration: 7 to 14 days

NB: This speculation can be considered to make decisions on lower timeframes.

Watch this space for updates as price action is been monitored.


Risk Disclaimer:
Margin trading in the foreign exchange market (including foreign exchange trading, CFDs, etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility.
You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment.
I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith.
Past performance is not necessarily indicative of future results.
Comment: A significant Breakdown of 6.46ish could be the beginning of another wave of decline.
Good Morning and Stay tuned in!
Comment: Breakdown finally happens! How is the present candle going to close?

Good Morning and Stay tuned in!