FxWirePro Short term Outlook: 1:3 short side risk-reward in USD/CNH

While giving a call on Chinese yuan earlier this week, we already defied our longer term outlook of a weakness in the Yuan against the dollar and forecasted that the yuan would gain on the weakness in the dollar in the first half of 2017. We have forecasted yuan to reach as low as 6.61 against the dollar. However, that call might take some time to reach and may not be palatable for short term traders,

Those who are looking to play short term, we recommend going long in yuan at the current rate of 6.843, with a stop loss around 6.873 and a target of 6.75.

We see the yuan benefiting from the weakness in the dollar as the reserve currency faces headwinds from winding up of monetary easing from other central banks.