Chinese Yuan Forecast: USD/CNH Teeters as AUD, NZD Bulls Wait
USD/CNH is stuck in a battle at key support—its next move could determine whether AUD/USD and NZD/USD extend their breakout or lose momentum.
Share this:
- AUD/USD and NZD/USD broke higher, but sustained gains may hinge on USD/CNH weakness.
- USD/CNH is coiling within a falling wedge, testing key support near 7.2130.
- A clean break lower could fuel further upside in the Aussie and Kiwi.
- Momentum signals remain mixed, keeping the FX stalemate intact—for now.
Summary
AUD/USD and NZD/USD delivered strong bullish breaks on Monday, adding to a solid session for cyclical assets across FX, equities, and some commodities. While this could mark the start of a broader bullish trend, a more convincing case for the Aussie and Kiwi would come with downside in USD/CNH.
USD/CNH Holds the Key
Source: TradingView
As the chart above shows, the inverse correlation between USD/CNH and AUD/USD, NZD/USD is consistently strong—ranging from relatively high to nearly perfect across various timeframes from one week to one year. This suggests that for the bullish breakout in AUD and NZD to extend, the renminbi may need to rip.
USD/CNH Teeters on Support Zone
Source: TradingView
Despite volatility and uncertainty generated by the trade war, USD/CNH has been grinding lower in early 2025, coiling within a gradual falling wedge. More recently, it has struggled to bounce from a key zone consisting of wedge support, the 200DMA, and 7.2130—a minor level that acted as support and resistance after the U.S. election in November 2024.
This zone is crucial for assessing directional risks in AUD/USD and NZD/USD. A clean break and close beneath it could open the door for a move towards 7.1500, where USD/CNH was repeatedly capped before the election.
Despite broad USD weakness against other majors, that hasn’t translated into meaningful downside in USD/CNH. The only bearish probe into the zone on March 12 was quickly reversed. Momentum indicators remain mixed—RSI (14) has marginally diverged from price in recent weeks, countering the bearish signal from MACD.
It’s a real stalemate, likely limiting upside in AUD and NZD against the USD and other majors. But when the deadlock eventually breaks—whether through a break of support or another push higher towards strong resistance above 7.3680—AUD/USD and NZD/USD are likely to move in the opposite direction.
-- Written by David Scutt
Follow David on Twitter @scutty
How to trade with City Index
You can trade with City Index by following these four easy steps:
- Open an account, or log in if you’re already a customer
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
- Search for the market you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
EUR/USD Forecast: Euro Struggles to Find Support Even After U.S. PCE Data
The euro continues to face a challenging environment in the short term. The currency has struggled to regain ground against a U.S. dollar that remains firmly supported, a dynamic reflected in EUR/USD, which has now recorded three consecutive losing sessions and a decline of roughly 0.6%.
Canadian Dollar Forecast: USD/CAD Four-Week Rally Eyes Yearly Highs 9 30 2026
USD/CAD has advanced in 14 of the past 15 sessions, but stretched momentum raises the stakes as major resistance and NFP come into focus.
British Pound Technical Outlook: GBP/USD Rebound Challenges September Downtrend 9 30 2026
Sterling has rallied sharply from key support, with GBP/USD at an inflection point that could determine whether a larger recovery is underway.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.