USD/CNH: 7-day trend of fixing higher breaks – OCBC

USD/CNH slipped after USD/CNY fix came in lower this morning, breaking the past 7-day trend of fixing higher everyday, FX strategist at OCBC Christopher Wong notes.

Third plenum to set long term policy

“Pair was last at 7.2929. Momentum is bullish though RSI shows signs of easing from near overbought conditions. Resistance at 7.30, 7.31 levels. Support at 7.2705 (21 DMA).”

“That said, apart from today, the recent USD/CNY fixings have followed a pattern that continued to reinforce our view that authorities are pursuing a measured pace of RMB depreciation. Change in daily fix on average was about +17.4 pips (19 Jun – 27 Jun) vs. average daily change of about 4.9 pips/day since May 2024.”

“Elsewhere, China announced third plenum will be held on 15 – 18 July to set long term policy on a wide range of economic and political issues.”