The US Dollar (USD) is expected to trade between 7.1190 and 7.1300 against the Chinese Yuan (CNH). Analysts suggest that if the USD drops below 7.1130, it might aim for 7.1000 next. Recently, the USD had a stable trading range, finishing nearly the same at 7.1242. The outlook stays the same as long as it remains below the resistance level of 7.1400.

FXStreet Insights Team

The FXStreet Insights Team gathers analysis from different financial experts. This includes general market insights and specific notes from commercial analysts. USD changes are just some of the many market topics discussed in newsletters and articles designed for informed decision-making. Other content covers recent trends in gold, Canadian CPI data, and global oil imports. FXStreet emphasizes that the information provided is not investment advice. Investors should do thorough research and consider any risks before making financial decisions. Since the USD/CNH is likely to trade within the range of 7.1190 to 7.1300, we see option selling strategies as suitable for now. Writing short strangles with strike prices outside this range could help traders earn premiums while the pair stabilizes. The low volatility makes this a good way to generate income.

Bearish Case and Positioning

We believe there’s a stronger chance for a dip toward 7.1130, and traders should consider preparing for this possible decline. Buying put options or creating bear put spreads targeting around this level provides a risk-defined approach to profit if support weakens. This strategy is more appealing as long as the pair stays under the key resistance level of 7.1400. This bearish outlook is supported by recent economic data from October 2025. China’s Q3 GDP growth was 4.9%, surpassing market expectations and indicating a stable economy. Additionally, the People’s Bank of China has been setting a stronger daily reference rate, helping the yuan strengthen. On the other side, the latest US inflation data for September 2025 showed a rate of 2.8%. This reinforces the idea that the Federal Reserve will likely keep rates steady through the year. The absence of upward pressure on US interest rates weakens dollar strength, contrasting with the 2023 policy differences that boosted the dollar. The 7.1400 resistance level is crucial for managing risk. A clear break above this mark would contradict the bearish outlook. Traders could use this level to set stop-losses on short positions or to rethink bearish options. The current tight range has reduced implied volatility, making options cheaper. For those expecting a big price movement but unsure of the direction, a long straddle could be a good strategy. This would profit from significant moves above 7.1300 or below 7.1190, taking advantage of a return to higher volatility. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now