USD/CNH Falls to Lowest Since May 2023 After Channel Break
USD/CNH technical break signals renewed downside pressure
USD/CNH traded lower for a fourth consecutive day and made a fresh low since May 2023 near 6.9060 (about -0.10% intraday), slipping through the lower boundary of a medium-term descending channel. Momentum indicators show the MACD below its signal line with a modestly widening negative histogram, while the RSI sits at 27 — a clearly oversold reading that warns of stretched selling.
Technical snapshot and tactical implications
The immediate technical picture favors a maintained short bias so long as price trades below the channel floor. Near-term resistance is identified around 6.9495 (the channel upper boundary), which can be used for tactical short entries with stops placed above the channel. However, traders should look for confirmation from a persistent negative MACD and the absence of a sustained RSI recovery before adding exposure to avoid chasing a false breakdown or short squeeze.
Key risks to the bearish view
Three principal risks could undermine the current bearish setup. First, the oversold RSI at 27 increases the probability of a corrective bounce, which could slow or temporarily reverse the decline. Second, if the MACD contracts toward zero it would signal fading downside momentum and raise the chance of a false breakout. Third, any abrupt policy communication from Chinese authorities or a sudden USD-strength reversal tied to US data or central-bank developments would invalidate the technical bearish case.
Macro context and related currency flows
Global macro news supports a cautious stance. Separately, Canadian labour data showed the unemployment rate falling to 6.5% in January — the lowest since September 2024 — with full-time employment growth around 3.3%, lowering the probability of near-term BoC easing and supporting the Canadian dollar versus the US dollar. Market participants are also awaiting delayed US employment figures and upcoming US CPI, while one-year-ahead US inflation expectations eased to 3.1% in January from 3.4%. Those US prints could quickly influence dollar direction and spill over into Asian FX, including USD/CNH, so traders should monitor US headlines closely. For additional context on China and Asian FX implications see the IMF growth update, and for examples of how dollar softness has driven cross moves see coverage of broader USD weakness or the episode after Powell's dovish remarks.
Practical guidance for traders
For retail traders, a disciplined approach is essential. Consider maintaining short exposure while price remains below the channel floor, and use rallies toward ~6.9495 as tactical entry opportunities with defined stops. Avoid adding size unless the MACD stays negative and the RSI shows no sustained recovery. Because macro events can rapidly change risk sentiment, keep position sizes conservative and confirm entries with both technical momentum and the broader news flow.
Tools and next steps
Automated tools can help manage entries, exits and risk in fast-moving FX moves. If you want to test structured execution and strategy discipline, review options like the Trade Assistant Bot or explore a Forex Trading Bot to run scenario-based rules and stop placement. PlayOnBit offers resources to backtest and execute tactical ideas while monitoring macro triggers in real time.
Conclusion
USD/CNH's break below the descending channel and the current momentum profile point to further downside risk, but stretched RSI and looming macro prints increase the likelihood of corrective moves. Traders should combine technical confirmation with macro vigilance and use disciplined stops. To try automated entry, risk management and execution for setups like this, try the AI trading bot at PlayOnBit — start with the Trade Assistant Bot to test rules-based forex strategies in a controlled environment.