The US Dollar (USD) is expected to move between 7.1280 and 7.1500 in the short term. Analysts believe that the USD’s quick rise to 7.1500 was too much and has since pulled back. In the longer term, the USD is likely to be between 7.1200 and 7.1550. Analysts have changed their outlook from positive to neutral, noting a recent dip to 7.1250 followed by a rise to 7.1500. While there is some upward movement, it isn’t strong enough for a continuous rise, and the USD is expected to stay within this range.

Opportunities in Low Volatility

With the USD/CNH expected to trade within a specific range, there is an opportunity to take advantage of low volatility. The pair is likely to settle between 7.1200 and 7.1550 over the next few weeks. This indicates that making directional bets for a big breakout might not be profitable right now. This situation is suitable for option-selling strategies that benefit from time decay and stable prices. Traders may want to consider setting up iron condors or short strangles with strike prices outside the expected range of 7.1200 to 7.1550. If the pair stays within this channel, these positions can profit as the options lose value as they near expiration. The neutral outlook is backed by recent economic data from both the US and China. Last week’s U.S. Consumer Price Index for September 2025 showed inflation at 2.8%. This stable inflation gives the Federal Reserve little reason to change its steady interest rate policy, removing a potential boost for the dollar in the near future. In China, the recently released GDP growth for Q3 2025 was 4.9%, which met market expectations. This indicates a steady, not rapidly accelerating, economic recovery and allows the People’s Bank of China to keep its current policy without needing major new stimulus. This balance between the two central banks supports the expectation of a currency pair that stays within a range.

Context of Market Stability

This stability marks a significant shift from the high volatility seen in 2022 and 2023, which was caused by aggressive rate hikes from central banks. As major economies now normalize their policies, the sharp movements of the past are giving way to consolidation. This historical context makes range-trading strategies more suitable for today’s market. Create your live VT Markets account and start trading now.

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