Is the Chinese Yuan’s Slump Against the Dollar a Temporary Setback—or the Calm Before a Market Storm?
Ever find yourself wondering if the USD/CNH dance is more of a tango or just a slow shuffle lately? Well, you’re not alone. OCBC’s sharp FX strategists Sim Moh Siong and Christopher Wong have been watching the moves closely, spotting that the recent surge in USD/CNH has hit a bit of a pause—hovering around 6.8020 with bullish momentum still humming but the RSI nudging down from overbought territory. It’s like catching your breath before the next sprint. The tricky bit? If the Dollar keeps flexing its muscles, the Chinese Yuan (CNH) might stay on shaky ground a while longer. But here’s the kicker—they’re calling the recent dip in the Renminbi a mere correction, not a full-blown trend reversal. So, while markets jitter over Fed hawkishness and tech sell-offs, the CNH’s wobble feels measured, not a meltdown, unless official fixes start shouting otherwise. Could this be a classic case of “don’t panic, just yet,” or is the next leg down lurking around the corner? Let’s dive deeper. LEARN MORE
OCBC’s FX strategists Sim Moh Siong and Christopher Wong note USD/CNH’s recent run-up has stalled, with the pair around 6.8020 and daily bullish momentum intact but RSI turning lower from overbought. They caution CNH may still trade on the back foot near term if Dollar strength persists, yet view recent Renminbi (RMB) slippage as a correction, expecting weakness to remain measured unless the fixing signals broader depreciation.
Momentum stalls near resistance
“The recent run-up in USD/CNH slowed overnight, tracking moves in the USD. Pair was last at 6.8020 levels.”
“Bullish momentum on daily chart intact but RSI shows tentative signs of turning lower from near overbought conditions. We continue to watch for signs of turnaround.”
“Resistance at 6.8260 (38.2% fibo). Support at 6.80 (50 DMA, 23.6% fibo retracement of 2026 high to low), 6.7750 (21 DMA).”
“We reiterate our caution that CNH may still trade on the back foot in the near term (possibly into quarter-end) if USD bullish momentum persists. We believe it may be too early to concur that the RMB appreciation trend has broken and still treat the recent slippage as a correction, after an extended run of measured appreciation.”
“The slippage in CNH was due to the broader USD strength, owing to the recent hawkish Fed rhetoric, and softer risk sentiment (due to sell-off in AI and tech-linked equities). We reckon CNH weakness to remain measured unless the fix starts to validate a broader weakening bias.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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