The US Dollar (USD) may rise above 7.1280 against the Chinese Yuan (CNH), but staying above this level could be tough. Analysts from UOB Group say that for a significant upward move, the USD needs to close above 7.1280, with a possible target of 7.1370. Currently, the upward trend for USD/CNH is slightly increasing. In the next 24 hours, the USD may cross 7.1280, but it might not hold. A drop to 7.1160 or 7.1100 could happen. Over the next one to three weeks, the outlook has changed from negative to neutral. We expect the USD to remain stable between 7.0920 and 7.1280, needing a close above 7.1280 for further gains. As long as 7.1020 is not broken, there is still a chance for the USD to close above 7.1280.

Other Market Updates

In other market news, gold is stuck above $4,000 due to the strength of the US Dollar and cautiousness from the Federal Reserve. The EUR/USD is close to three-month lows, and AUD/USD is down ahead of a Reserve Bank of Australia meeting. Overall, global risk sentiment is cautious due to economic uncertainties. Meme coins like Dogecoin are decreasing in value, and Cardano (ADA) has seen a 6% drop, continuing a bearish trend. Upward momentum for the USD against the CNH is building, but it’s unclear if it will continue. Traders should keep an eye on the 7.1280 level in the coming weeks. A daily close above this would signal a potential move toward 7.1370. Until then, any rise above 7.1280 is likely to be temporary, with crucial support around 7.1020. This view is supported by recent data from China. The Caixin Manufacturing PMI for October 2025 was at 50.1, showing only slight growth and a slowdown from the previous month. This weaker outlook may lead the People’s Bank of China to keep a loose policy, affecting the Yuan. On the other hand, the US Dollar remains strong despite a disappointing ISM Manufacturing PMI reading of 48.7. The market is more focused on the robust US labor market, with the October non-farm payrolls report showing an addition of 210,000 jobs. This difference suggests that the Federal Reserve may keep interest rates higher for longer compared to other countries.

Options Strategy and Currency Pressures

With uncertainty around the key 7.1280 resistance level, a well-defined options strategy could be wise. We suggest considering a bull call spread on USD/CNH, such as buying the 7.1300 call and selling the 7.1400 call. This strategy could help you profit from a potential breakout while limiting costs and losses if the resistance holds. The dollar’s strength is affecting other major currencies, with EUR/USD trading near three-month lows around 1.1520. This policy divergence became clearer in mid-2025, as Eurozone inflation cooled faster than in the US. Recent Eurozone CPI data for October 2025 came in at 2.2%, raising speculation that the European Central Bank might cut rates before the Fed. Gold is also feeling the pressure, struggling to rise above $4,000 per ounce. We recall the strong rally from below $2,000 seen in 2023, driven by inflation fears. Now, in late 2025, high-interest rates make holding non-yielding assets like gold costly, limiting its potential for growth, even amid ongoing geopolitical uncertainties. Create your live VT Markets account and start trading now.

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