Christine Lagarde, Managing Director of the IMF, welcomes China’s decision on its national currency, calling it an important step.
She is convinced that "This underlines China's commitment to rebalance its economy toward domestic consumption and allow market forces to play a greater role in determining the level of the exchange rate…"
At this point, the Chinese Yuan exchange rate cannot be changed by more than 0.5% within a trading day. The new rules will widen the change ratio up to 1%.
According to , USDCNY is forming wave A/B of wave level H5 and has been traded in the 6,2905-6,317 range (formed by this wave) over the last week. A break out of the range will determine the direction of the future mid-term trend. In order to start a rally, a break above 6,317 and a bullish FZR are needed. The closest major levels of resistance are 6,3260 and 6,346. A break below 6,2905 will trigger the downward scenario.
