I felt pretty strongly about this one back at the beginning of the year. And I still do… here’s what I know from my experience in the financial markets: FX is the name of the game.
You can watch, talk about, and also make a lot of money trading the GPROs, GOOGLs, AAPLs, TSLAs, etc of the world but the REAL market is the currency market.
This past year we have had a very real race to debase. and, quite frankly, it isn’t looking good folks.
This move to devalue the Yuan by the Chinese was 1) expected and 2) ranks up there as a very big deal… I believe they are committed to depreciating their currency.
One has to ask .. why is the worlds second largest economy taking these measures? Well, of course it’s because all is well and the global economy is doing GREAT! Or, could it be that a global sovereign debt crisis is on the horizon?
US Dollar (USD) vs YUAN CHART – 20 Year
There is a major global move occurring within the biggest market in the world – the FX market.
Not only is the YEN,RUBLE and EURO simply crashing, the Chinese Yuan continues to weaken against the US Dollar. I believe that this is a big deal and should be watched closely. We’ve been blogging about the Chinese Yuan for a while now.
It appears that the long-term pattern has worked and the Dollar may be starting to rise vs the Yuan again. As you can see on the charts, the USD:Yuan has filled a majority of that gap… and the recent lows could be a very important low as the USD strengthens vs the Chinese Yuan. Note the monthly reversal bar in the zoom chart below.
USD vs Chinese Yuan Chart – Open Gap
USD vs Chinese Yuan CHART – Monthly Reversal Bar?
Thanks for reading.
Twitter: @BartsCharts
Author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
