Stock market rally has legs suggests BofA currency chart

Bank of America-Merrill Lynch sees proof the inventory market’s bullish exercise has near-term endurance.

And, it is utilizing a currency chart for instance its case.

Paul Ciana, the agency’s chief international technical strategist, highlighted the greenback versus the Chinese yuan on CNBC’s “”Futures Now” to show the strength of “danger on” (or high-yielding, risk-sensitive) property.

His large takeaway: The broader market rally has room to run as a result of the greenback/yuan currency pair is in a downtrend.

“We have a technical top in the U.S. dollar versus the Chinese yuan. Now, that’s a very important technical top to have because it means the dollar is weakening,” he stated Thursday. “The lower that the exchange rate between the U.S. dollar and the Chinese Yuan comes down, the more it is a sign, per say, that the trade agreements between the U.S. and China are going well.”

The greenback versus the yuan has been buying and selling at its weakest degree since July.

“We have a nice left shoulder, head and right shoulder that formed. That neckline was broken just the other day right in here. We’re now legging down not to one, but to a second new low,” stated Ciana.

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