Based on our latest calculations at FxWirePro, we find that the yuan is trapped in a Bull/Bear fight. The Chinese yuan came under stress lately thanks to the escalating trade war between China and the United States, after reaching as high as 6.23 per USD. It is currently trading at 6.69 per USD.
After reaching the recent peak in April, yuan depreciated fast to reach as low as 6.73 per USD by the end of June. As reports came out early July suggesting intervention by the People’s Bank of China (PBoC) to curb volatility, it quickly strengthened to 6.6 per USD. Nevertheless, the price action strongly suggests that the bearish speculation in the Chinese yuan still remains at large. However, the PBoC remains a formidable force in the Chinese yuan market.
Our calculations suggest that the Bulls are targeting an area of 6.57 per USD, riding on the hope of another PBoC intervention, whereas yuan bears are eying 6.85 per USD over trade tensions and a stronger dollar.
