Insights 
VT 
The USD/CNY fix was adjusted to 7.0968 from 7.0995 the previous day. The USD/CNH was last recorded at 7.1270.
The People’s Bank of China (PBOC) has been setting the currency fix stronger, averaging about 8 pips per day since April. This aims to control the RMB’s appreciation and supports the goal of RMB internationalisation.
Key Days Ahead For USD CNY Analysis
The next few days are important to determine if the adjustment below 7.10 is temporary or a continuing trend. If USD/CNY drops below 7.10, it could influence other USD-Asia ex-Japan currencies (USDAXJs).
The bullish momentum on the daily chart is decreasing, with a falling Relative Strength Index (RSI). There is a downward risk, with support levels at 7.1150 and 7.08, and resistance at 7.1330 and between 7.1420 and 7.1460.
The central bank’s daily fix is pushing the Yuan to its strongest level since last October 2024. This continues a pattern we have seen since April 2025, suggesting a deliberate and controlled strengthening of the currency. For us, this signals that the authorities are comfortable with the current economic trajectory and want to project stability.
This controlled appreciation aligns with China’s goal of internationalizing the RMB and comes on the back of solid Q3 GDP figures which showed a 4.9% year-over-year growth. Meanwhile, moderating inflation in the US, with September’s CPI at 2.8%, has tempered expectations for any further Fed rate hikes, putting broad pressure on the dollar. The upcoming trade negotiations in early November may also be influencing this policy of allowing gradual Yuan strength.
Bullish Momentum And Derivative Strategies
We see bullish momentum for the US dollar fading on the daily charts, with the RSI indicator also pointing downwards. This suggests derivative strategies should favor further downside in the USD/CNH pair in the coming weeks. Traders might consider buying put options on USD/CNH or establishing bear put spreads to profit from a potential move towards the 7.08 support level.
The key here is the “measured pace” of about 8 pips per day, which has kept implied volatility relatively subdued compared to the sharp spikes we saw back in 2015. This makes buying options an attractive, lower-cost way to position for a potential breakdown below the 7.10 level. However, if this controlled grind continues, strategies that benefit from low volatility, like selling out-of-the-money call spreads, could also be considered.
We need to watch the 7.10 level closely over the next few days to confirm if this is a sustained break or a temporary dip. A consistent close below this could accelerate a move towards the next major support at 7.08. Resistance is now seen around the 21-day moving average near 7.1330, and any move back above that level would challenge this bearish outlook.
