darcsherry

USDCNH | Perspective for the new week | Follow-up details

Long
FX:USDCNH   U.S. Dollar/Chinese Yuan
We witnessed a 1,000pips run in our direction since my last publication on this pair (see link below for reference purpose) and the confirmation of reversal set-up at the Breakout of Neckline ( CNY 6.39500) during last week trading session is the final straw that broke the camel's back for me.
Higher US bond yields and hawkish Fed expectations shine the light of hope on the Greenback and we could witness a continued bullish momentum as investors brace for the Fed's meeting next week.

Tendency: Uptrend ( Bullish )
Structure: Breakout | Supply & Demand | Reversal pattern ( Double Bottom )
Observation: i. It has been a mix of Bearish momentum for the USD since the beginning of this year.
ii. Finding a bottom twice at CNY6.36800 within the month of October 2021 - this level in recent time sharing memory for Demand (May 2021) could be an opportunity to take advantage of a short term rally.
iii. Double Bottom: The appearance of an extremely bullish technical reversal pattern describing a change in trend and a momentum reversal from prior leading price action may not be a coincidence.
iv. And since testing the demand zone the second time, the price continued to find higher highs that culminated in a Breakout of Neckline @ CNY6.39500 on Friday to signify the potential direction majority might be heading in the coming week.
v. With this development in place, it will be appropriate that we take advantage of this potential rally at the retest of Neckline.
vi. The early hours/days of the new week might witness a further plunge in price to test the Neckline @ CNY6.39500 or below to incite Trend continuation.
vii . Hence, above the Neckline remains a comfortable level to take a long position on this pair.
NB: Please note that the narrative so far supports a temporary bullish momentum and this is so after putting into consideration the long term downtrend perspective... Trade consciously!😊
Trading plan: BUY confirmation with a minimum potential profit of 300 pips.
Risk/Reward: 1:4
Potential Duration: 2 to 7days

NB: This speculation might be considered to make individual decisions on the lower timeframe.

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


Risk Disclaimer:
Margin trading in the foreign exchange market (including commodity trading, CFDs, stocks 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.

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