Societe Generale strategists report that the USD/CNH currency pair has resumed its downward trajectory after repeatedly failing to break above the 50-day moving average, which has acted as a resistance level since last year [1]. The strategists note that while the decline appears somewhat stretched, there are currently no clear signals of a meaningful rebound. The next downside targets are identified at 6.77 and the 2023 trough of 6.69, with near-term resistance seen in the 6.81–6.85 range [1].
The article highlights that the recent drop in USD/CNY to a three-year low of 6.7861 demonstrates the People's Bank of China's (PBoC) tolerance for yuan appreciation and reflects optimism regarding reduced trade tensions and a surplus in the country's balance of payments [1]. Additionally, upcoming presidential discussions between the US and China over the next 48 hours, while considered secondary to broader geopolitical issues, are noted as potentially constructive for trade and technology relations. The possibility of establishing a Board of Trade for non-sensitive goods is mentioned as a marginally positive development that could help foster confidence in ongoing dialogue and trade relations [1].
No analyst opinions or forward-looking statements beyond the technical targets and the context of trade discussions are provided in the source [1].
CONCLUSION
USD/CNH continues its decline toward key support levels, with technical targets at 6.77 and 6.69, as optimism grows around easing trade tensions and yuan appreciation. The PBoC's stance and upcoming US-China discussions may further influence market sentiment, but no immediate rebound is signaled by current technical analysis.