Chinese Yuan And What We Can Learn From The Swissy

In the Forex market the common mantra has always been “a healthy currency is a healthy economy”. I believe this is about as accurate an assessment as you will find.

The Chinese Yuan and economy remains consistently under fire and the there is only so much the government can do to help. The market forces will dictate the direction. To illustrate, look back less than a year ago when the SNB showed up for the Swiss France. It was tumultuous to say the least and the markets were rocked. Within hours the USD/CHF strengthened from 1.0200 all the way to 0.8325. That kind of movement is huge! But guess what? Less than a year later it’s almost back to that same 1.0200 level.

The lesson is clear: Markets go where the markets want to go and any interference other than a major catastrophe will not change it.

I believe the same course charted right now in China. The slow down and the resulting effect on commodity prices tells the story.

Follow The Green.

I know I sound like a broken record over the last year because all I have spoken about is my continued belief in the strengthening of the USD. The mighty Greenback seems unstoppable and last Fridays NFP Jobs Report is just another reason to support another rate hike from the Fed. Interest rates increases attract overseas funds. Overseas funds translates to buying USD, and results in a strengthening currency. It is as simple as basic economics 101.

So where to Now?

The ForexSignal Trading Desk sees any upward movement in all pairs against the USD (except JPY) as a strong opportunity to enter long positions buying USD. Our outlook for the week ahead remains strongly bullish and we look forward to hopefully many trading opportunities being presented. This means our subscribers can look forward to being receiving Forex signals with exact Entry Point, Stop and Take profit levels.

Trend Meters

Our Trend Meters are updated daily and are available with a ForexSignal subscription. See below for the Trend Meters shown as a screenshot at the start of this week January 11-15, 2016. ForexSignal.com subscribers can login to our ForexSignal.com members only platform to view current Trend Meters at any time.