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From a record high in the first week of January the US dollar has steadily lost ground against the offshore yuan ever since – despite US President Donald Trump’s promise to make America great again. The move is mature, has retraced a Fibonacci 61 per cent of the previous rally, and maps out as a five wave move where the fifth wave is the same height as the first one. Interestingly waves two and four are similar in size, suggesting this has been an orderly, controlled move. Last week the greenback became more oversold than it has been since January 2014, adding to our view that this lengthy move is close to an end so expect a climb back up to the 6.8900 area.
Nicole Elliott is a technical analyst
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