USD/CNH has restarted its fall after failing several times to break above the 50-day moving average, which has limited rebounds since last year. Near-term resistance is seen in the 6.81–6.85 area.
The move is described as stretched, but there are no clear signals of a rebound. Downside targets are placed near 6.77 and the 2023 low at 6.69.
US and China presidential talks are expected within the next 48 hours. Discussion areas include trade and technology, with a Board of Trade mentioned for non-sensitive goods.
USD/CNY fell to a 3-year low of 6.7861. This is linked to tolerance by the PBoC for yuan strength, easing trade tension expectations, and China’s balance of payments surplus.
We see that the dollar’s exchange rate against the offshore yuan has resumed its slide. This comes after it repeatedly failed to break above its 50-day moving average, a ceiling that capped rebounds when we look back at the action from 2025. This technical pattern suggests persistent weakness for the dollar in the coming weeks.
The yuan’s strength is backed by fundamental data, as China’s trade surplus for April 2026 recently came in strong at $72.35 billion, beating market forecasts. This reflects a healthy balance of payments, giving the central bank confidence to allow the yuan to appreciate. This suggests the downward trend in USD/CNH is not just a technical move but is supported by real economic activity.
On the other side of the pair, the dollar is softening due to shifting expectations around US interest rates. With the latest US inflation figures for April 2026 coming in below expectations at 2.9%, traders are pricing in a less aggressive Federal Reserve. This policy divergence further supports a lower USD/CNH going forward.
For derivative traders, this environment favors strategies that profit from a continued decline in the USD/CNH. Buying put options could be a direct way to play this, targeting the 6.77 level and ultimately the significant low of 6.69 seen back in 2023. The 6.81 to 6.85 zone now acts as a key resistance area to watch for any failed bounces.
Upcoming presidential discussions between the US and China, while not the main event, add to this view. Any progress on trade relations can help reduce uncertainty and support investor confidence in Chinese assets. This backdrop reinforces the existing downward pressure on the currency pair.
