Forex Technical Update June 21, 2010 AUD/USD Gaps up after China Depegs RMB to USD
- Daily and 4H: China unpegged the yuan (RMB) to the USD, ending a 2-year freeze, since July 2008. The market felt that if the Chinese currency is allowed more flexibility to appreciate, the rise in purchasing power could be positive for the economies of Australia for example, whom China imports from.
- The open gap reflects this sentiment.
- We may be in a wave 5′, or maybe it already ended after the bap failed to push above 61.8% retracement at 0.8888.
- The daily shows the market testing a declining 50-period moving average, which is widening its bearish spread with the 200-period moving average. This is an area of resistance.
- At least in the short-term there should be some consolidation. In the intermediate term, we may start the bearish continuation. towards the 0.8070 low and lower.
Fan Yang Currency Analyst Commodity Trading Advisor
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