In the last years, the renminbi made a pause in his attempt to get stronger against USD dollar. In February 2014, renminbi found support at 6.0153 as wave ((III)) and from there it made a perfect zig – zag correction structure to equal legs at 7.1964 high in September 2019. After these 3 swings, USDCNH should have continued with the downtrend. However, the pair turning up again breaking 7.1964 high suggesting that the pair was developing a double correction structure.
USDCNH July 2023 Weekly Chart
More than a year ago, the wave “a” began at 6.0153 (2014 low) and moved higher in 3 waves structure almost hit 7.00 dollars ending at 6.9854 high. After this zig zag correction, we had a huge drop to 6.2359 developing a double correction structure to end wave “b”. The volatility did not leave things like that and an enormous rally took place in the beginning of wave “c”. This movement developed again 3 waves higher completing wave “c” at 7.1964 and also wave (w) reaching the equal leg extension.
After that, we could see that an expanded flat correction took place as wave (x) completing as an ending diagonal at 6.3058 low in 2022. Almost the whole year, the USDCNH moved higher building an impulse structure. We labelled as wave “a” ended at 7.3748 high above wave (w) confirming the bullish sequence. Then, the pair made a wave “b” correction ended at 6.6883 low and bounced in the last leg higher.
USDCNH October 2024 Weekly Chart
In the current chart, looks like the first leg of the wave “c” is completed. Up from 6.6883 wave “b” low, we can see 5 swings higher creating an impulse that ended at 7.3679 high and we labelled as wave ((1)). Also, the wave ((2)) pullback finished. The correction made a zig zag structure (A), (B) and (C), ending at 6.9705 low. Exactly in the expected area of 7.12 – 6.95. After ending wave ((2)), pair should continue the rally to build an impulse as wave “c” to 7.4866 – 7.7646 area. This also will finish the wave (y) and the double correction as wave ((IV)), where renminbi should resume the downtrend.
Source: https://elliottwave-forecast.com/forex/renminbi-usdcnh-buyers-bullish/