The USD/CNH currency pair is expected to trade within a slightly narrower range of 7.1170 to 7.1280. This is a shift from the previous forecast of 7.1220 to 7.1350, as we’re seeing a small increase in downward momentum. In the next one to three weeks, the USD will likely stabilize between 7.1120 and 7.1330. Although we initially thought the USD might reach 7.1450, it has since dropped to a low of 7.1205, showing that upward momentum is fading. Overall, support levels remain steady, indicating a stable trading environment.

Range Trading Strategy

In the weeks ahead, we expect the USD/CNH pair to stay range-bound between 7.1120 and 7.1330. The earlier upward trend for the dollar has weakened, making a strategy focused on low volatility a good choice. This suggests that big price swings are unlikely. Given this stable outlook, selling options for premium could be an effective tactic. For example, an iron condor strategy—selling a call option above the expected range and a put option below—could be beneficial. This means selling a call above 7.1330 and a put below 7.1120 to capture value while the currency pair remains stable. This outlook is supported by recent economic data; China’s Q3 2025 GDP growth was steady at 4.8%, easing concerns of a slowdown without suggesting overheating. Additionally, the People’s Bank of China has been setting its daily yuan fixing rate to maintain stability, as shown by its actions throughout October 2025. This preference for stability backs up the idea of a contained trading range.

Historical Context and Future Risks

We’ve seen similar patterns before, particularly in late 2024. Back then, the pair was stuck in a tight range for several weeks due to mixed economic signals from both the US and China. History shows that when major economic factors balance out, the USD/CNH pair tends to lose its directional momentum. Thus, traders should keep an eye on implied volatility—if it continues to drop, selling premium will become even more appealing. While the current range seems solid, it’s important to use risk-defined strategies. Unexpected inflation reports from the US or policy changes from Beijing could easily disrupt these forecasts. Create your live VT Markets account and start trading now.

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