USD/CNY fix was set lower again this morning at 7.0968 vs 7.0995 yesterday. USD/CNH last seen at 7.1270, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Bullish momentum on daily chart is fading

"This is the strongest since Oct-2024 and the pattern of setting the fix stronger looks like a continuation of PBOC's 'measured' pace of appreciation (average of about 8pips per day) since Apr, via the fix to influence the path of RMB."

"This is in line with our long-held view for a measured pace of appreciation and also consistent with PBOC goal of RMB internationalisation. The next few days will be key to monitor if this is a one-off fix below 7.10 or the trend can continue."

"This can potentially have some spillover effect onto other USDAXJs especially if USD/CNY can go below 7.10. Bullish momentum on daily chart is fading while RSI fell. Risks somewhat skewed to the downside. Support at 7.1150, and 7.08 (76.4% fibo retracement of 2024 low to 2025 high). Resistance at 7.1330 (21 DMA), 7.1420/60 levels (50 DMA, 61.8% fibo)."