The currency market is once again the real judge of the stock markets. By now, most traders and investors have heard that the USD/CNY is trading near 7.0457. Over the weekend, China seems to have retaliated against the United States and its threat of increased tariffs. China is simply devaluing its currency to boost its exports to offset U.S. tariffs. This is a move which the U.S. has actually warned China about in the past. Reports are also out in the financial media that China will suspend new US agricultural product purchases by Chinese companies.
With all of that said, we look to the chart. The current break-out pattern of the USD/CNY chart suggests that it will continue to climb into the 7.35 to 7.50 level. So get ready, this is not ending anytime soon.
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