USD/CNH Faces Bearish Pressure at Critical Support Levels

ChainSpy · 2026-01-15T21:01:45+00:00

The USD/CNH exchange rate is under pressure due to persistent USD weakness and a policy-driven yuan appreciation. Recent low fixings indicate a strategy for gradual RMB strengthening. The pair's technical indicators suggest potential further decline if key support levels are breached.

ChainSpy

2026-01-15 21:01:45

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CNY Gradual Appreciation Keeps USD/CNH Under Pressure

The USD/CNH exchange rate has settled near recent lows, with market dynamics heavily influenced by persistent USD weakness and a significantly lower USD/CNY fixing. Currently trading around 7.0427, the pair is navigating through a carefully orchestrated policy environment where the yuan continues its controlled appreciation trajectory.

Last Friday’s USD/CNY fix reached 7.0638—the lowest level in 14 months—signaling policymakers’ intent to guide the RMB toward gradual appreciation while preserving market stability. This fixing pattern, consistent since April 2025, represents a deliberate strategy rather than organic market movement. Market participants have noted a consistent divergence over the past two weeks: both spot prices and Bloomberg consensus forecasts for daily fixes have consistently undershot the actual fixing levels, a pattern worth monitoring for potential shifts in policy pace.

Technical Setup: RSI Approaching Oversold Territory

From a technical perspective, daily momentum indicators are pointing downward while the Relative Strength Index approaches oversold conditions. The support level stands critically at 7.0380—a break below this threshold could unleash further downside movement, potentially pushing the pair toward the 7.00 psychological level. A decisive close beneath this support may trigger accelerated selling.

Resistance is positioned at 7.08, which aligns with the 21-day moving average (21 DMA). Additional downside catalysts include another round of lower USD/CNY fixings or broader US dollar weakness across major currency pairs.

What’s Next for USD/CNH?

The pair faces a fork in the road: policymakers could either moderate their fixing-lower trajectory—potentially offering temporary consolidation—or maintain the current aggressive pace, which would continue to add to downside pressure. Either way, USD/CNH remains in a distinctly weakening phase until evidence of stabilization emerges.

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