One of the best movers this week and therefore this year has been the UsdCny which we’ve noted has traded phenomenally well to the downside on the long term trend lines. The move was helped along by stronger Chinese PMI and of course a weaker USD across the board after the FOMC minutes and general trimming of USD longs into the NFP’s. I’ve attached a couple of charts to show how long the lines have been in place and how well the market has respected them on the way down with all levels providing good break entries as well as target levels to take profit.
The support trend line down at 6.7800 (dating back to the low in May) now looks to have taken on an increased significance, especially if we see a weaker result from the Non Farm Payrolls later today. To the topside a break or 6.8300 looks like the next level to target although we note that it’s a relatively short term TL with 6.8700 and then 6.9200 the stronger levels on the way back up.