OCBC strategists Sim Moh Siong and Christopher Wong highlight that USD/CNH dipped after a stronger USD/CNY fix below 6.80, the first such level since February 2023. They read this as policymakers being comfortable with further RMB appreciation while managing the pace. Technically, they see mild bullish momentum in USD/CNH, with support at 6.75/76 and resistance at 6.80 and 6.8320.

PBoC fix strategy and key levels

"USD/CNH dipped, taking cues from a lower USD/CNY fix on Friday. The fix was set at 6.7989, below 6.80 for the first time since Feb 2023 and lower than 6.8036 prior. But the fix was still 51 pips weaker than Bloomberg consensus at 6.7938."

"This may suggest that policymakers are comfortable with further RMB appreciation but remain mindful of the pace. Further fixes below 6.80 should be supportive of RMB, though the gap against market expectations will remain important in interpreting PBoC’s bias."

"USD/CNH last at 6.7820 levels. Mild bullish momentum on daily chart intact while RSI looks flat. 2-way trade still likely. Support at 6.75/76 levels. Resistance at 6.80, 6.8320 (DMA)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)