USD/CNH remains pressured near recent lows, weighed by broad USD softness and a low USD/CNY fix. While daily momentum is mildly bearish and RSI approaches oversold levels, a break below 7.0380 could trigger further downside, whereas resistance sits at 7.08. Pair was last seen at 7.0427 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

RMB gradual appreciation supports pair

"USD/CNH continued to trade near recent low. Broad USD softness and low USD/CNY fix were some of the factors weighing on the USD/CNH. Last Fri, the fix was set at 7.0638, the lowest in 14 months. The fixing pattern remains consistent since Apr-2025 and we view this as a deliberate move to steer the RMB on a gradual appreciation path while maintaining market order."

"Elsewhere we observed that both spot and Bloomberg consensus for daily fix have been below the actual fix for the last 2 weeks. We are monitoring if policymakers would moderate the pace of setting the fix lower or continue with a similar trajectory. The latter may continue to add to downside pressure while the former may see some temporary consolidation in spot."

"Daily momentum is mild bearish while RSI is near oversold conditions. Support here at 7.0380 levels. A decisive break past these levels risks the pair overshooting towards 7. Another lower USD/CNY fix or broader USD softness may well be see further downside move materialise. Resistance at 7.08 (21 DMA)."