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    UOB Group expects USD/CNH to near 7.1500 before a possible retracement

    by VT Markets
    /
    Sep 27, 2025

    Risks And Uncertainties

    This content contains forward-looking statements that carry risks and uncertainties. Readers should do their own research before making any financial decisions. This article is for informational purposes only and should not be considered financial advice. The views expressed do not reflect the official position of FXStreet and are not a recommendation for trading any instruments. Recently, the US Dollar has climbed, nearing the 7.1480 mark earlier this week and showing signs of reaching 7.1500. This increase is driven by a widening interest rate gap. The Federal Reserve kept a hawkish stance during its September 2025 meeting, while China’s central bank is easing its policies. Given the overbought situation, we should be cautious of a possible pullback once the 7.1500 level is reached. For those expecting a move to 7.1500, a bull call spread could be a good strategy in the coming weeks. By buying a call option with a strike price slightly below the current level, like at 7.1400, and selling a call at the 7.1500 resistance, traders can benefit from the anticipated price rise. This strategy sets clear limits on potential profit and loss, which fits well with the view that a jump over 7.1600 is unlikely soon.

    Options Trading Strategies

    Given the overbought conditions and the low chances of breaking above 7.1600, selling options premium is another option to consider. A bear call spread, which includes selling a 7.1550 call and buying a 7.1600 call for protection, could bring in income if the currency pair remains stable as expected. Historical data from 2023 and 2024 shows that Chinese authorities frequently intervened to control depreciation around these levels, reinforcing this resistance. Regardless of the chosen strategy, it’s crucial to monitor the 7.1250 level, which is now strong support. If this level is broken decisively, it would indicate a loss of upward momentum for now. For any bullish positions, this is the key level to reassess and possibly exit to manage risk. Create your live VT Markets account and start trading now.

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