In the past decade, USDCNH has oscillated around the central axis of the upward channel on the weekly chart, organizing around the upper and lower channels.
This also aligns with the fact that the renminbi has never deviated into extreme trends; one should not bet on a super one-sided trend.
The upper and lower ranges encapsulate the changes in the strength of China's exports, and the core essence of the renminbi still relies on exports for momentum, with the cyclical turning points of export strength not being influenced by short-term factors.
The global trade recovery in 2017-2018 led to strong domestic external demand and strong exports, thus the USDCNH price would move towards the lower bound of the channel. The pandemic in 2020/2021 caused supply chain disruptions, with domestic exports shining globally; as the pandemic gradually recovered and global supply chains began to fracture, USDCNH again moved towards the lower bound of the channel.
We all know what happened in the following years; the deterioration of the situation prompted USDCNH to return to the vicinity of the upper bound of the channel.
The hawkish cabinet about to take office in the U.S. in 2025 could visibly accelerate this process, with USDCNH further approaching new highs.
The patterns of the renminbi over the past decade have not been broken, and USDCNH will eventually reach 7.52.
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