The US Dollar (USD) is unlikely to fall below its low of 7.0860 against the Chinese Yuan (CNH) this year. Analysts say that while there is risk for the USD, it remains uncertain if it can break this level.
Recently, the USD dipped to 7.1029 before settling at 7.1095, marking its largest drop in two months. While the market appears oversold, it may still fall below 7.1000 before rebounding.
Short Term Pressure And Market Observations
In the coming weeks, the USD is likely to face downward pressure with its recent low in mind. However, it’s uncertain if it will break the year-to-date low of 7.0860. If it surpasses the resistance level of 7.1280, this could ease some of the downward pressure.
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Economic Data And Trading Strategies
The US Dollar is under downside pressure, but it’s uncertain if it can break its low of 7.0860. After a large one-day loss in two months, the pair currently appears oversold. This suggests a potential bounce or consolidation may happen before the next significant movement.
This pressure on the dollar is backed by recent economic data. For example, the US inflation rate for September 2025 was 2.8%, slightly under expectations, easing the Federal Reserve’s need for a strict approach. Meanwhile, China’s Q3 GDP growth of 4.9% indicates economic stability, supporting the yuan.
For derivative traders, strategies that capitalize on the pair’s failure to break key levels could be beneficial in the coming weeks. Selling put options with strike prices below the support level of 7.0860 might be a good way to profit, as this level is expected to hold. This strategy takes advantage of time decay and reduced volatility if the pair stabilizes.
Alternatively, given the strong resistance at 7.1280, traders might consider a bear call spread. This would benefit if the pair stays below that level, indicating that any upward movement will likely be limited. Reflecting on the volatility in 2023, when the pair was above 7.30, makes these current levels important psychological markers for the market.
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