The US Dollar may drop below 7.0860 soon, with a key level to watch being 7.0770. If it rises above 7.1150, it would signal that the USD’s decline is easing, according to UOB Group’s FX analysts.
In the past 24 hours, the expectation was for the USD to test the 7.0860 level. A further drop seemed unlikely, but the USD dipped to 7.0886 and then bounced back, finishing at 7.0980, only up 0.04%. The downward pressure has eased, and now a range trade between 7.0900 and 7.1080 is anticipated.
1-3 Weeks View
Looking ahead 1-3 weeks, the outlook remains the same: the USD might fall below 7.0860. If that happens, the next point to watch is 7.0770. Only a rise above 7.1150 would show that the USD’s decline, which began in mid-October, has stabilized.
Recent price trends indicate that the US Dollar could drop below 7.0860 against the offshore Yuan. If it breaks this support level, we will keep an eye on a move toward 7.0770. The bearish sentiment will ease only if it rises above the important resistance at 7.1150.
The potential for a weaker dollar is supported by recent economic data. The latest US Consumer Price Index for September 2025 was lower than expected at 2.8%, leading to speculation that the Federal Reserve might consider a rate cut in early 2026. In contrast, China’s economy is showing surprising strength.
China’s economy appears to be quite stable, with a reported GDP growth of 5.1% for Q3 2025, exceeding market expectations. Strong industrial production figures have further bolstered this positive trend. This economic divergence is putting pressure on the USD/CNH pair.
Derivative Traders Outlook
For derivative traders, the outlook suggests positioning for a possible fall. Buying put options with strike prices at or below 7.0860 could be a smart move to take advantage of the expected decline. This strategy provides a defined risk while allowing for potential drops toward the 7.0770 target.
From a risk management angle, the 7.1150 level is crucial. If the price breaks above this mark, it would indicate that the dollar’s decline has stabilized, which could prompt a rethink of short positions or the setting of stop-loss orders.
This downward pressure marks a major shift from the market trends observed in 2023, when the pair was trading at highs near 7.35. A break below 7.0860 would confirm that a new, lower trading range has emerged over the past year.
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