US continues to impose sanctions on Chinese companies
Technical Analysis Summary USD/CNH: Buy
| Indicator | Value | Signal |
| RSI | Buy | |
| MACD | Buy | |
| MA(200) | Neutral | |
| Fractals | Neutral | |
| Parabolic SAR | Buy | |
| Bollinger Bands | Neutral |
Chart Analysis
On the daily timeframe, USDCNH: D1 went out of the downtrend. A number of technical analysis indicators formed signals for further growth. We do not rule out a bullish movement if USDCNH rises above the last upper fractal and the 1st Fibonacci mark: 6.85. This level can be used as an entry point. We can set a stop loss below the Parabolic signal, the low since April 2019 and the last lower fractal: 6.74. After opening a pending order, we move the stop loss to the next fractal low following the Bollinger and Parabolic signals. Thus, we change the potential profit/loss ratio in our favor. After the transaction, the most risk-averse traders can switch to the four-hour chart and set a stop loss, moving it in the direction of the bias. If the price meets the stop loss (6.74) without activating the order (6.85), it is recommended to delete the order: some internal changes in the market have not been taken into account.
Fundamental Analysis of -
The United States imposed sanctions on Semiconductor Manufacturing International Corporation (SMIC), China's largest microelectronics and computer chip manufacturer. Will USDCNH quotes grow ?
An upward movement means the correction and weakening of the Chinese yuan against the US dollar. Note that in the 2nd quarter of 2020, the yuan appreciated against the US dollar by almost 4%. This was its highest quarterly growth since the beginning of 2008. Before SMIC, the US had already imposed sanctions on China's largest mobile phone and internet equipment manufacturer, Huawei, as well as about 50 other smaller companies. This could negatively affect on the Chinese economy amid its trade war with the US. Last week, US President Donald Trump said in a campaign speech in Pennsylvania that he would end the American economy's dependence on Chinese goods if he wins the upcoming November 3rd elections. China's NBS Manufacturing PMI and Caixin Manufacturing PMI for September are due Wednesday morning in China. They could affect the yuan's exchange rate ahead of the long weekend of October 1-8 (Mid-Autumn Festival this year coincided with China's Education Day).