Charge exchange (CX) is an important process in shock physics since it indicates an interaction between downstream ions and ambient neutral hydrogen, suggesting a presence of a collisionless shock. We present a high-resolution spectroscopy of an X-ray bright spot in a nearby supernova remnant (SNR), the Cygnus Loop, with the Reflection Grating Spectrometer (RGS) onboard XMM-Newton. The target is a compact knotty structure called southwestern knot (SW-K) located at the outer edge of the shell, where the blast wave is likely interacting with dense surrounding materials. The RGS spectrum of the SW-K shows details of the line features below ~ 1 keV, where we discover a high forbidden-to-resonance line ratio of OVII He$alpha$. The soft-band (10-35 AA) spectrum is well explained by a thermal component with a CX X-ray emission obscured by neutral and ionized absorbers. The presence of the CX X-ray emission will provide new insights into the shock physics of SNRs. The high-resolution spectroscopy also reveals that the CNO, Ne and Fe abundances are truly lower than the solar values (0.2-0.4 solar) at the SW-K region . Our result gives a clue to solving the previously known low-abundance problem reported from a number of evolved SNRs.