China Attempts to Crush Yuan ShortsCurrencies / China Currency Yuan Jan 05, 2017 - 04:05 PM GMT
Yuan shorts suffered a bone crushing short squeeze over the course of this week after it hit an expected Master Cycle low on December 29. The retracement hit Intermediate-term resistance at 23.60 yesterday. Currently CYB is hovering in that zone.
CYB may go higher, but it cannot rally beyond the bottom of Wave 1 at 24.24. If it goes higher, the likely target appears to be the 50-day Moving Average at 23.74.
ZeroHedge writes, “As we observed earlier, China’s currency gained 0.5% in offshore market to 6.8275 vs dollar, earlier surging as high as 6.78, extending its 2-day advance to 2%, the most on record, driven by a direct attack by the PBOC on shorts, whom it crushed overnight when it pushed the overnight offshore Yuan deposit rate to 80%, the highest in history.”
I have not been tracking the Cycles for CYB in any great detail, since it is an ETF and not an index, which is what I report on. However, it appears that Wave 5 in CYB is currently inversely correlated to TNX. If so, the decline may resume by next week.
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