USD/CNH dropped for the fourth day in a row during Tuesday’s Asian session, hitting its lowest point since May 2023. It traded close to 6.9060, down over 0.10% for the day.
This decline is part of a medium-term trend that started after the peak in April 2025. The price has also slipped below the bottom of a short-term downward channel.
MACD indicators show the MACD line is below the Signal line, hovering around the zero level. The negative histogram has expanded slightly, indicating growing downward momentum.
The daily RSI stands at 27, suggesting oversold conditions that may prevent further losses in the near future. A change in momentum would involve the MACD moving back toward zero and the RSI rising above 30.
If there is a price rebound, the downward trend may still limit gains. The first resistance level to watch is 6.9495, near the upper channel boundary.
This analysis was supported by AI tools.
Looking back, the bearish sentiment from late 2025 unfolded as expected, with USD/CNH breaking out of its downward channel. That strong downtrend brought the pair to multi-year lows by the end of last year. At that time, technical indicators pointed to significant downward momentum.
Since then, the situation has changed. The pair has now bounced back to around 6.9800. This change is mainly due to differing policies: the People’s Bank of China lowered its one-year Loan Prime Rate last month to help an economy that underperformed with Q4 2025 GDP. Meanwhile, strong US jobs data from January 2026 keeps the Federal Reserve cautious about cutting rates.
In the upcoming weeks, traders might want to prepare for further gains, as the fundamentals now favor a stronger dollar. One strategy could be to buy call options with strike prices near the key level of 7.0000. Another option is to use bull call spreads to manage costs, especially as implied volatility may rise with the shift in trends.
Caution is advised, as the daily RSI is nearing overbought levels above 65, which could trigger some short-term profit-taking. If the price fails to break and stay above the recent highs around 6.9950, it may indicate that this rebound is losing strength. A drop below 6.9500 would put the current bullish outlook at risk.
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