Chinese Yuan: Constructive appreciation bias maintained – OCBC

OCBC strategists Sim Moh Siong and Christopher Wong report a measured but persistent appreciation trend in the Chinese Yuan (RMB), with onshore spot and the CFETS index at four-year highs. The People's Bank of China (PBoC) is guiding a stronger fixing, maintaining a constructive bias for the RMB. They note downside-skewed technicals and support levels, while China's Fifth Plenum reaffirmed growth targets without new stimulus, indicating policy comfort with gradual RMB strength.

The RMB has extended its appreciation, reaching fresh four-year highs against USD and on a trade-weighted basis. Despite USD remaining relatively firm against other major currencies, the RMB's resilience is notable. The FXStreet Insights Team retains a constructive bias on RMB, with the steady progression in the fixing suggesting little inclination from policymakers to reverse the appreciation trend, though the pace may moderate.

USD/CNH was last seen at 6.6580 levels, with mild bearish momentum intact and RSI falling into oversold conditions. Broad bias remains skewed to the downside, with next support at 6.65 before 6.62 levels, and resistance at 6.6830 (21 DMA) and 6.70 (50 DMA).