CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

As Trade Talks between US and China Diminish Yuan Sells Off

October 8, 2019 6:03 PM

As Trade Talks between US and China Diminish, Yuan Sells Off

Yesterday, the US imposed sanctions on 28 Chinese tech firms.  Today, China’s Liu He said he will not be negotiating on Xi’s behalf.  The Chinese delegation will leave a day earlier than originally planned, on October 11th instead of the 12th.   The White House is looking to limit Chinese stocks within government pension fund. China is mad at the NBA.  All negative headlines!  How can any kind of trade deal get done with all the negative headlines coming out today from both China and the US?  At least, that’s what USD/CNH was thinking today, up almost 0.45%!

USD/CNH began its uptrend when it put in a triple bottom between February 25th and April 17th at 6.6745.    However, it moved higher in earnest on July 26th and put in new highs on September 3rd at 7.1955.  This level is just above the 161.8% Fibonacci extension from the highs on October 31st, 2018 to the previously mentioned triple bottom lows.  Since those early September highs, price has traded down to 7.0309 on September 13th, and has been moving slowly higher since then, hugging a rising trendline which goes back to July 25th.  The candlestick today was also a bullish outside candle, encompassing the entire candle from yesterday.

Source:  Tradingview, City Index

On a 240-minutes timeframe, price broke out of a symmetrical triangle and is currently testing the 78.6% Fibonacci retracement level from the highs on September 3rd to the lows on September 13th at 7.1638.  Above there, USD/CNH can head right up and test previous highs at 7.1992.  First support comes in at the broken trendline near 7.1535 and then will look to fill the gap from Friday’s close at 7.1135 (and contend with the upward sloping trending near that same level). 

Source:  Tradingview, City Index

If the rhetoric and headlines continue to be negative towards a trade deal getting done over the next few days, watch for USD/CNH to continue higher and possibly at a more rapid pace. 


StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024