OCBC currency strategists Sim Moh Siong and Christopher Wong note that the USD/CNH pair’s recent rally has stalled at around 6.8020, the daily uptrend has not changed, but the RSI has fallen due to overbought conditions. They caution that CNH may continue to depreciate in the near term if dollar strength continues, but they view the recent decline in the renminbi (RMB) as a correction, expecting the weakening to remain measured unless the strengthening signals a broader depreciation.

Momentum stalled near resistance

“The recent USD/CNH rally has slowed overnight, tracking movements in the USD. The pair was last trading at 6.8020.”

“The bullish momentum on the daily chart remains unchanged, but the RSI is showing preliminary signs of decline from near overbought conditions. We continue to see signs of a turnaround.”

“Resistance at 6.8260 (38.2% Fibo). Support at 6.80 (50 DMA, 23.6% Fibo High-to-Low Retracement in 2026), 6.7750 (21 DMA).”

“We reiterate our caution that CNH may continue to depreciate in the near term (perhaps through the end of the quarter) if bullish USD momentum continues. We believe it may be too early to accept that the RMB appreciation trend has been broken and continue to treat the recent slippage as a correction after an extended run of measured appreciation.”

“The decline in CNH prices was driven by broader USD strength resulting from the Fed’s recent hawkish rhetoric and softer risk sentiment (due to the sell-off in AI and tech stocks). We believe CNH weakness will remain subdued unless a correction begins to confirm broader downtrends.”

(This article was created with the aid of an artificial intelligence tool and has been reviewed by an editor.)