U.S. Dollar/Chinese Yuan (USD/CNY) Surges Following China’s Devaluation
Following China’s devaluation on Tuesday of the yuan, the U.S. dollar/Chinese yuan currency pair (USD/CNY) has surged, reaching as high as 6.4485 so far today (Wednesday). It has now reached the most overbought level on a weekly basis since 2001 (based on weekly 14-period Relative Strength Index (RSI) momentum indicator), and is extremely overbought based on the daily chart, getting close to the maximum reading of 100.
The USD/CNY has now reached a relatively large potential resistance zone, from approximately 6.4379 to 6.4770. That potential resistance zone is derived from multiple Fibonacci analysis measurements, and a measured move that is double the first leg up off the January 2014 bottom.
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