The US Dollar (USD) is currently in a consolidation stage, trading between 7.0900 and 7.1070. Analysts from UOB Group predict a negative outlook for the USD, with the next level to watch being 7.0885. Recently, the USD fell to a low of 7.0918 but managed to close at 7.1000, showing a slight gain of 0.03%. It seems the currency will continue to trade within the range of 7.0900 and 7.1070 today. Immediate resistance levels are set at 7.1030 and 7.1085.

US Dollar Consolidation Outlook

Over the next one to three weeks, the outlook for the USD remains negative as long as it stays below the strong resistance level of 7.1170. Previously, resistance was seen at 7.1235. This information comes from FXStreet Insights Team, which compiles notes from various analysts. The US Dollar appears to be stabilizing against the offshore yuan, but this seems to be a temporary pause before potentially falling again. We see 7.0885 as the next key level to watch. This suggests that traders might look for strategies that profit from a declining USD/CNH rate. The negative view on the dollar is supported by recent signals from the Federal Reserve, indicating a potential pause in interest rate increases, as noted in their November 2025 statement. Additionally, last week’s inflation data for October 2025 came in slightly lower than expected at 2.9%, raising speculation that the Fed might cut rates next. The market is now pricing in more than a 50% chance of a rate cut by the second quarter of 2026. On the flip side, recent data from China is promising, with industrial output in October 2025 increasing by 4.8% year-over-year, exceeding expectations. This strong performance suggests that the People’s Bank of China may have less incentive to weaken its currency. The growing difference in policy between a Fed that may pause and a stable PBOC supports a stronger yuan.

Trading Strategies for USD/CNH

From a trading standpoint, the 7.1170 level is crucial; if the USD breaks above this, our negative outlook would be challenged. Given the current consolidation, buying USD put options with a strike price around or below 7.0900 could be a smart move to prepare for a potential decline. This strategy helps traders manage their risk while aiming for a drop toward 7.0885. We’ve seen a similar pattern in the past during 2022-2023, when aggressive Fed rate hikes boosted the dollar significantly. Now, with the US economy maturing faster than China’s recovery after reopening, the situation appears to be changing. This historical comparison indicates that shifts in central bank policies can lead to lasting trends in currency movements. Create your live VT Markets account and start trading now.

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