USD/CNH Price Forecast: More downside likely below 6.7500

USD/CNH trades marginally lower to near 6.7750 as the US Dollar edges down.
China’s CPI remains steady at 1.2% YoY in May, misses 1.3% estimates.
Investors await the US inflation data for May.

Sagar Dua FXStreet

The USD/CNH pair trades slightly lower to near 6.7750 during the early European trading session on Wednesday. The pair faces selling pressure due to continued outperformance by the Chinese Yuan (CNY), being a trade surplus economy.

On Tuesday, China’s Trade Balance data for May also came in stronger than projected. Trade Balance arrived at $105.43 Billion, higher than the $92.1 Billion estimate and the previous reading of $84.82 Billion. Imports grew strongly by 27.4%, while they were anticipated to rise moderately by 25% vs. the prior release of 25.3%. While Exports rose 19.4% against expectations of 15% and the previous release of 14.1%.

Meanwhile, China’s Consumer Price Index (CPI) data for May has remained steady at an annualized pace of 1.2%, while it was expected to grow at a faster pace of 1.3%.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.12% lower to near 99.87 ahead of the United States (US) CPI data for May, which will be published at 12:30 GMT. The US headline inflation is expected to come in higher at 4.2% Year-on-Year (YoY) from 3.8% in April.

USD/CNH technical analysis

USD/CNH trades lower at around 6.7763, extending the downside bias as spot holds below the 20-day Exponential Moving Average (EMA) at 6.7867. The pair trading below this short-term average suggests sellers retain control, while the 14-day Relative Strength Index (RSI) around 42 stays below the neutral 50 line, hinting at lingering bearish momentum rather than an oversold condition.

On the topside, immediate resistance is now aligned with the 20-day EMA at 6.7867, and a daily close above this barrier would be needed to ease current downside pressure and open the way for a more sustained recovery. On the downside, the pair could slide further towards 6.7500 if it falls below the June 2 low at 6.7580.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Consumer Price Index (YoY)

The Consumer Price Index (CPI), released by the National Bureau of Statistics of China on a monthly basis, measures changes in the price level of consumer goods and services purchased by residents. The CPI is a key indicator to measure inflation and changes in purchasing trends. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Renminbi (CNY), while a low reading is seen as bearish.

AUD/USD consolidates above 0.7000/two-month low; bearish potential intact

The AUD/USD pair oscillates in a narrow range during the Asian session, and moves little following the release of mixed inflation figures from China. Spot prices currently trade around the 0.7025 region, nearly unchanged for the day, and remain within striking distance of a nearly two-month low set on Tuesday. Renewed hostilities between the US and Iran temper hopes for a deal to end the over three-month-old war.

Japanese Yen languishes despite wholesale inflation accelerates in May

USD/JPY flatlines after experiencing volatility, trading around 160.40 during the Asian hours on Wednesday. The pair continues to hold its ground, reflecting a struggling Japanese Yen that has failed to find support despite a massive acceleration in wholesale inflation. Driven by surging energy costs linked to the ongoing Middle East conflict, Japan’s Producer Price Index jumped 6.3% year-over-year in May. This hot printing comfortably outpaced April’s upwardly revised 5.3% figure and surpassed market consensus of 5.5%, marking the fastest pace of wholesale price growth in three years.

$4,200: Gold retains bearish bias near March low ahead of US CPI

Gold recovers slightly after touching a fresh low since March 23, though it retains a bearish bias near the $4,200 mark through the early European session. Renewed hostilities between the US and Iran fuel inflationary concerns and bolster bets for more hawkish central banks, which is seen as a key factor driving flows away from the non-yielding yellow metal. Furthermore, the decline could be attributed to technical selling following the recent breakdown below the very important 200-day SMA.

Bitcoin remains vulnerable, Ethereum weakens further, XRP signals more downside

Bitcoin, Ethereum, and Ripple remain under pressure mid-week, as the broader cryptocurrency market struggles to regain recovery momentum after last week’s massive correction. BTC struggles below $62,000, ETH continues to weaken below $1,650, while XRP’s momentum indicators remain biased toward further downside.

US CPI data set to show inflation at three-year high in May, backing Fed hawkish tilt

The US Bureau of Labor Statistics will publish the May Consumer Price Index (CPI) data on Wednesday. The report is expected to show another step up in consumer inflation, driven by the persistently high Oil prices due to the ongoing crisis in the Middle East.

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.