USD/CNH remains under pressure near recent lows, weighed by broad-based USD/CNH weakness and low consolidation of USD/CNH. While daily momentum is slightly bearish and the RSI is approaching oversold levels, a break below 7.0380 could spark further downside, while resistance lies at 7.08. The pair was last seen at 7.0427 levels, noted OCBC forex analysts Francis Cheung and Christopher Wong.
Gradual appreciation of the renminbi supports the pair
“The USD/CNH pair continued to trade near its recent lows. Broad-based dollar weakness and the lower rate of the US dollar against the Chinese yuan were among the factors that weighed on the USD/CNH pair. Last Friday, the flat rate was set at 7.0638, a 14-month low. The consolidation pattern remains stable since April 2025, and we view this as a deliberate move to guide the renminbi on a gradual rising path while maintaining market order.”
“Elsewhere, we note that the spot price consensus and Bloomberg consensus on the daily fix have been lower than the actual fix over the past two weeks. We are watching whether policymakers will ease the pace of setting the fix lower or continue on a similar path. The latter may continue to add further downward pressure while the former may see some temporary consolidation in the spot price.”
“Daily momentum is moderately bearish while the RSI is near oversold conditions. Support is here at 7.0380 levels. A decisive break beyond these levels threatens to take the pair beyond towards 7. Another lower repair of USD/CNY or broader USD weakness could materialize further downside movement. Resistance is at 7.08 (21 DMA).”
