The US Dollar may drop against the Chinese Yuan, but it’s unlikely to go below 7.1750. Right now, the dollar is trading between 7.1600 and 7.2240. Recently, the dollar fell by 0.26%, closing at 7.1910. There’s some downward pressure, but hitting 7.1750 seems unlikely, with support at 7.1820 and resistance at 7.1970 and 7.2080. A few weeks ago, the dollar peaked at 7.2140 but has since dropped. It looks like it’s found a range between 7.1600 and 7.2240, which indicates a pause in upward movement. This information includes statements about the future that may be influenced by risks and uncertainties. The markets and instruments discussed are for informational purposes only and should not be seen as a recommendation to buy or sell. Be sure to research thoroughly before making any investment decisions. You are responsible for all risks and costs related to investing. The author and source are not liable for any inaccuracies or omissions in the provided information. The US Dollar is in a trading phase against the Chinese Yuan, stuck between 7.1600 and 7.2240. After rising to 7.2140 recently, the dollar’s upward momentum has halted, leading to a sideways movement. This consolidation offers a clear range for trading in the near term. Recent economic data supports this view. On August 1, 2025, cooling US job numbers eased pressure on the Federal Reserve, limiting the dollar’s potential for gains. At the same time, the People’s Bank of China maintains its support for the yuan, setting today’s reference rate at 7.1850, stronger than many had expected. Given this narrow range, we think strategies that sell volatility might work well in the coming weeks. Selling short-term strangles with strike prices just outside the 7.1820 support and 7.2080 resistance levels could help us collect premium. This strategy benefits from the expectation that the currency pair won’t make significant moves. Another tactic is to use options to trade within this range. We might consider buying call options as the dollar approaches the 7.1820 support level or buying put options near the 7.1970 resistance. These positions would let us profit from small fluctuations within the defined channel. Looking back from our perspective in 2025, this market behavior is similar to the consolidation we saw in late 2023, when the currency pair stayed in a range for several months. During that time, implied volatility was low until new policies triggered a breakout. So, it’s important to stay alert for any unexpected changes in central bank statements later this month.

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