USD/CNH Elliott Wave Pattern Points To Recovery
EWM Interactive | Mar 22, 2019 06:46AM ET
Less than five months ago, on November 1st 2018, the U.S. dollar climbed to 6.9806 against the Chinese yuan, following a sharp rally from as low as 6.2359 in March. Unfortunately for bulls, USD/CNH couldn’t maintain the positive momentum. As of this writing, it is hovering around 6.7200.
In order to find out if the recent slide is going to continue, let’s examine the pair’s 4-hour chart through the prism of the Elliott Wave principle.
The 4-hour chart of USD/CNH reveals that the structure of the decline from 6.9806 to 6.7071 is impulsive. It is labeled 1-2-3-4-5, where the sub-waves of wave 3 and wave (iii) of 3 are clearly visible, as well.
Impulses point in the direction of the larger trend, but are followed by a three-wave correction before it can resume. According to this analysis, traders can expect a three-wave recovery to lift USD/CNH to at least 6.8000 from now on.
The MACD indicator provides another reason for optimism. It shows a double bullish divergence between waves 3 and 5. If this count is correct, the bulls are eager to return and the time to join the bears is long gone.
Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.