USD/CNH traded higher but eased post CNY fix. Pair was last at 7.2236, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Bullish momentum on daily chart intact

“CNY fix came in much stronger than expected this morning – ‘conveys’ a message that recent spot USD/CNH move may be coming close to testing policymakers' threshold of tolerance for CNH weakness. On one hand, it may serve as a deterrence against further weakening in RMB but on the other, trump trade momentum may mean that USD/CNH remains better bid on dips.”

“Given a strong USD trend, policymakers can only slow pace of RMB depreciation at best. For USD/CNH to reverse trend, the USD needs to ease.”