FX_IDC:USDCNY   U.S. Dollar / Chinese Yuan
There has been much talk lately on the Chinese yuan (RMB) dethroning the US dollar as the world's main reserve currency within the next decade or so.
I have been analysing the chart of USD/RMB from an Elliot wave's perspective to assess the possibility of that occurring.

In my analysis, the pair USD/RMB has completed the running flat pattern (W) and is currently on the 'c' wave of the zigzag pattern (abc). The orange box, in the 8 region, is the target price of the (X) wave. This is followed by a retracement in the form of a triangle or flat (Y) and will bring the pair down to the low end of the 7 region as depicted in the chart.

The Y pattern can be viewed as a consolidation phase for the pair before rallying higher. It took 5 years to complete the W pattern. One would then expect a similar timeframe for the Y pattern.

I will label the corrective pattern (W) flat, (X) zigzag, (Y) flat or triangle, as a running double three pattern, with the possibility of the end of wave 2 higher than that of wave 1.

I reckon that USD will gain from strength to strength against the RMB in the years to come, though it will not be in a linear form. As such, it is highly unlikely that the Chinese yuan will replace the US dollar as the world's reserve currency in the next decade, let alone in the foreseeable future. IMHO.

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