Get started

USDCNH

Does Fed raise rates to weaken China yuan? USDCNHI wanted to take a moment to share some exciting news with you all about the USDCNH (US dollar and Chinese yuan) currency pair. As many of you may know, the Chinese economy has been showing signs of weakness lately, directly impacting the yuan's value. The Federal Reserve has also raised interest rates, weakening the yuan against the US dollar. But what does this mean for us as forex traders? It means there is an excellent opportunity to long the USDCNH and potentially make some serious profits. So, I encourage you to take advantage of this situation and consider going long on the USDCNH. With the yuan's continued weakness and the Fed's interest rate hikes, there's a good chance this currency pair will continue to rise. Don't miss out on this opportunity to make some serious gains. Start trading the USDCNH today and take advantage of the current market conditions.
Long
by bryandowningqln
Debt ceiling aside, watch the dollar and central bank meetings!As the debt ceiling discussions draw to a close, the dollar's rally indicates that markets have largely priced in this event. The focus now returns to the Federal Reserve (Fed) and its notably hawkish stance. Fed officials' recent statements and fed fund futures, which are pricing in another rate hike in the upcoming meeting, suggest it might be the right time to reassess the dollar pairs. Two weeks ago, we discussed the USDCNH pair, which made a swift upward move. Interestingly, the correlation between USDCNH and USDAUD has been increasing, and USDCNH has been a leading indicator for the last few moves, with USDAUD following its trend shortly after. To understand why, let's look at the AUDCNH as well as the USD. The moves in these pairs seem to be largely driven by the USD, as the AUDCNH has remained range-bound since 2022. The Reserve Bank of Australia (RBA) is scheduled to meet on June 6th and is expected to maintain its policy, while the Fed will meet on June 13th and is expected to hike rates. This divergence in monetary policies could further strengthen the case for a USDAUD rally. Current yield differentials continue to favour the USD carry trade and this trend appears set to continue as the Fed is expected to raise rates while the RBA remains on hold, widening the yield differentials. With the Fed poised for another rate hike and the RBA expected to maintain its policy stance, along with the dollar's strengthening and the USDCNH leading the AUDUSD pair, we could express our market views via a risk-managed trade long on the USD and short on the AUD. To set up this position, we can take a short position on the Micro AUD/USD futures, with stop-loss orders placed at 0.673 and take-profit orders at 0.627. A Micro AUD/USD futures contract represents 10,000 AUD, with each point move in AUD equalling USD 10,000. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com
Short
by inspirante
3
USD JPY - FUNDAMENTAL ANALYSISYen Undervalued, Yuan to Lose Ground Danske Bank continues to expect that the Bank of Japan will tighten monetary policy this year, although the timing remains very uncertain. While a key argument against the Euro is that the currency is overvalued, it considers that the Japanese currency is substantially undervalued. According to Danske; “Overall, USD/JPY seems fundamentally overvalued and combined with potential monetary policy tightening; we expect the cross to drop below 130 on a 6-12M horizon. If inflationary pressures in Japan continue to persist, it will increasingly build pressure on the ultra-dovish stance that the BoJ has. Danske expects the Chinese yuan will lose ground due to broad dollar gains. A weaker Chinese currency would also act as a barrier to Euro gains.
Short
by thunderpips
The case for a Weaker Yuan The most recent Caixin Manufacturing PMI dipped below 50, landing back in contraction territory after two prints above the 50-mark. As the world's top exporter, China is acutely sensitive to fluctuations in both exports and manufacturing numbers. Historically, we've seen periods of Yuan devaluation during times of contracting Manufacturing PMI and exports as China works to invigorate export demand. With the latest PMI number trending lower, it's worth pondering whether this signals a movement toward a weaker Yuan. A more detailed examination of Chinese economic data presents some reasons for concern. Chinese export-related economic data has collectively taken a downward turn. This could stimulate further Yuan weakening as the government strives to reinvigorate exports. Moreover, as the world's second-largest oil importer, lower oil prices gives China additional leeway in weakening its currency, as the ripple effects of higher oil prices are tempered. From a technical perspective, the CNH is teetering on the edge of the 200-day moving average, and prices have once more nudged above the 0.382 Fibonacci retracement level. Meanwhile, in a shorter timeframe, we notice price action breaking out of the ascending triangle and nearing the top of the wedge pattern. With the USD breaking to the upside coupled with the potential for a weakening Yuan, we think this makes the case for a higher USDCNH. Taking a risk-managed long at the current level of 6.9520, a prudent stop 6.8930 and take profit level at 7.0900. A Standard Size USD/Offshore RMB (CNH) Futures represents 100,000 USD. Prices are quoted in RMB per USD, each 0.0001 per USD increment equal to 10 CNH. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com
CME:CNH1!Long
by inspirante
8
Higher low on USD/CNH hints at countertrend bounceYield differentials between the US and China 2-year treasury note continue to suggest USD/CNH could be oversold, at least over the near-term. The daily close chart (above in black) also better shows the potential for a higher low, as part of a countertrend move. The daily candlestick chart shows a recent pullback has failed to retest the 6.6976 low, and yesterday formed a 2-bar bullish reversal pattern (bullish piercing line). Whilst prices remain within a small retracement channel, we’re now looking for a break higher and minimum move to the highs around 0.6800 (near the monthly pivot point, 100% projection and recent highs). Should it break higher, then the it has the potential to extend to the 138.2% or 161.8% projection levels, the latter of which is by the 200-day EMA. Further out, I doubt Beijing will want their currency to depreciate too much given weak export data, so its possible the anticipated move higher is simply a countertrend move which could later break to new cycle lows.
Short
by City Index
1
USDCNH - one of the most important charts in FX markets A key set-up for the radar - we currently see a solid test of the H&S neckline, where a break targets 6.6500 - a move here would be conditional on a moderation in US core CPI (due 13 Dec) and a fed funds terminals rate headed to 4.75% - however, any decline in this cross would lift AUD, NZD and be thematic of outperformance in Chinese equities Price is breaking down and while we typically see less interest in this cross than a G10 FX pair, it's importance in macro markets cant be overstated.
Short
by Pepperstone
Update on the Chinese YuanA few months ago, I proposed USDCNH/USDCNY consolidating for a bit and then going higher, as such strong moves usually follow through. The Chinese economy looks extremely weak for multiple reasons, and I see no way that the CNH/CNY won't lose much of its value relative to the dollar. Technically it is ready for another strong move higher, and the fact that Pelosi is visiting Taiwan could be the catalyst for a breakout. Of course, I could be wrong, and the market has a pullback first. However, I think that would be a buy-the-dip opportunity. Going down to 6.6 would be a gift, and that's where I'd want to add to my long positions (short CNY). In my opinion, the market will take out the double top at 7.2$ first, maybe pull back, and then move significantly higher. However, my first target is a bit lower because I do some resistance there, as there was a breakdown that was never retested. Regardless of what your target is, the R/R here is tremendous.
Long
by BitcoinMacro
1
The USDCNH/USDCNY move was extraordinaryAs the Chinese economy was slowing even before the lockdowns, the strict lockdowns put a lot more pressure on the CNH/CNY. This created a huge divergence in the policies of the Fed and PBoC, as one was hiking and the other was cutting. For quite some time the USD was going up against most currencies, except the CNY... until one day the market fully reversed and rallied much higher. By looking back to the USDCNH price action over the last decade, we can see that the two times we got such huge rallies, the market initially pulled back, and then went higher. Now when we compare the duration of those rallies, their magnitude and how overbought the market got by using different metrics, they all look fairly similar as a whole. For example the first one from 2015 was longer and slightly larger than the current one, but the initial leg was brutal. The second one from 2018 was the largest and quickest, however the market wasn't that overbought and the move made more 'sense'. Therefore this move has the potential to be just like the previous two. In the short term I could easily see USDCNH trade back to 6.53-6.58, but my long term target is above the 7.2 double top. The same way the double top around 7 broke and the market went to 7.2, I expect the market to go above the 7.2 double top. No idea where could it top, but it is possible that we get a prolonged bull for USDCNH.
Long
by BitcoinMacro
USD/CNH:BUY From PREMIUM Area for a LONG Setup The USD in the last session, by the macro news, has a loose value against the EUR, this will affect all the pairs correlated, especially all the ones with the first denominator starting with USD. Today I want to talk about USD/CNH that comes from a long Bullish rally where in the last sessions it's inside an accumulation rectangle. We are looking to buy again here at a discount, around the 50% and 61.8% FIBO levels where the Dynamic trendline of the Bullish channel can work as additional support. The Alternative scenario will happen if the price will broke 78.2% Fibo and the Bullish channel will be invalidated.
Long
by FOREXN1
7