Up-Gap for China ETF

This morning's announcement by the Bank of China to allow U.S. trading firms and individuals to open accounts (in its NY branch) to buy and sell yuan might have signaled a significant move by Chinese authorities to let the currency both freely trade and to allow market forces to push its value higher -- to avert criticism prior to the China Premier's visit to Washington next week.

A higher yuan has self-serving interests as well, with China battling inflationary concerns, all of which likely has contributed to today's up-gap strength that has propelled the iShares FTSE China 25 Index Fund (FXI) towards a test of its prior rally peak at 45.18 (from Dec 2).

Can the China market decline into a state visit? Possible, but unlikely, don't you think... especially in the highly interventionist world in which we find ourselves. That aside, the near-term technical set-up remains very favorable for higher prices that hurdle 45.18 on the way to 47.00-48.00.