USD/CNH drop after correction
2023.02.03 11:07
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USD/CNH drop after correction
After the ECB press conference yesterday, we witnessed a nice and strong reversal in the markets, which fell sharply but rallied broadly.
More USD strength can be seen as a result of these impulsive intraday moves; however, US jobs data should not be overlooked today. Everyone believes that job data will worsen sooner or later, and if that occurs, the markets will be shocked; Stocks may initially experience a sharp decline due to the possibility of a recession before likely recovering due to dovish speculations.
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This week, US stocks are doing well, but the pair isn’t yet breaking down. It persists in wave four, with the intention of completing wave four at higher levels with a wave c rally.
Therefore, metals and can be pulled lower if USD/CNH really sees more gains (only short-term). I really want to see progression down into wave five on USD/CNH for stable risk-on, but that clearly hasn’t happened yet. Technically speaking, the dollar appears to be poised for a further rise in line with USDCNH.