Market Analysis Background

The US Dollar (USD) is likely to stay within a range of 7.0680 to 7.0880 against the Chinese Yuan (CNH). However, there is a strong downward trend in the long term. If the USD falls below 7.0600, analysts from UOB Group suggest that the next target could be 7.0400. In the past 24 hours, the USD dropped to 7.0663, then bounced back to 7.0816 before closing at 7.0763. This indicates it may stabilize today within the same range of 7.0680 to 7.0880. Key resistance levels to watch are 7.0750 and 7.0830. Over the next one to three weeks, analysts are generally pessimistic about the USD due to strong downward momentum. Despite a recent rebound, they will be monitoring for any drop below 7.0600, as breaking this level could lead to further declines. A significant resistance level at 7.0930 must hold to support this bearish view. This analysis comes from FXStreet Insights Team, which gathers market insights from various experts, offering perspectives from both commercial and independent analysts. On November 28, 2025, it appears the US dollar will trade sideways against the Chinese yuan, mostly staying within the 7.0680 to 7.0880 range. This low volatility may present an opportunity to sell options premium, and strategies like short strangles with strikes just outside this range could help generate income during consolidation.

Market Conditions and Strategies

The pressure on the USD/CNH pair remains downward, supported by recent economic data. China’s export growth in October 2025 was 3.5%, surpassing expectations and indicating strong global demand. This economic strength in the yuan increases the likelihood of a lower USD/CNH moving forward. On the US side, inflation metrics showed Core PCE falling to 2.9%, hinting that the Federal Reserve may keep interest rates steady into early 2026. This divergence with a strong Chinese economy is putting additional stress on the dollar, with the market estimating less than a 10% chance of another Fed rate hike in the next six months. For traders anticipating a drop in the coming weeks, a move below 7.0600 could be pivotal. Purchasing put options with a strike price of 7.0500 may provide a good chance to profit from a decline toward the next major support at 7.0400. This level, not tested since the third quarter of 2024, is an important psychological point. Risk management is crucial, as a rebound could undermine this bearish outlook. The 7.0930 level serves as strong resistance, and any sustained movement above it would suggest that downward momentum is weakening. A bear put spread could help reduce initial costs and manage risk if the pair turns unexpectedly. Reflecting on past behaviors, the current calmness in the market is reminiscent of late 2023’s consolidation before a significant directional shift. Implied volatility for USD/CNH options is near one-year lows, indicating that positioning for a potential breakout may be relatively cost-effective right now. This stands in stark contrast to the high volatility experienced during the global supply chain disruptions of 2022. Create your live VT Markets account and start trading now.

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