The US Dollar (USD) may test the 7.1500 level before pulling back, with 7.1600 appearing unlikely soon. Upward momentum for the USD is growing. If it surpasses 7.1500, the next target could be 7.1600.<\/p>\n
Yesterday, USD reached 7.1480, nearing the 7.1500 resistance. Although conditions are currently seen as overbought, room remains for a further test of 7.1500. Support for the USD is found at 7.1380 and 7.1330.<\/p>\n
In a longer view covering one to three weeks, the USD has transitioned into a consolidation phase, testing the upper levels of a previous range. A break above 7.1500 might lead to a move towards 7.1600. Conversely, a drop below 7.1250 signals limited upward movement.<\/p>\n
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The US Dollar is showing strong upward momentum, with an important test of the 7.1500 level likely in the coming days. For traders, this points towards positioning for a potential breakout by considering call options with strike prices at or just above 7.1500. Given that short-term conditions are overbought, waiting for a small pullback towards the 7.1380 support level could offer a better entry point.<\/p>\n
This dollar strength is being fueled by the Federal Reserve’s persistent “higher-for-longer” stance on interest rates, a narrative we have seen all year. Recent US inflation data from August 2025 came in at 3.1%, slightly hotter than consensus and reinforcing the idea that rate cuts are not imminent. The attractive yield on the dollar continues to drive capital inflows.<\/p>\n
Conversely, the economic picture from China presents a contrast, with recent data suggesting a more challenging growth environment. For example, China’s Caixin Manufacturing PMI for August 2025 dipped to 49.8, indicating a slight contraction in the sector. This economic divergence between the US and China is a fundamental driver supporting the dollar’s rise.<\/p>\n
While the outlook is bullish, we must treat the 7.1250 level as the key support that validates this trend. A decisive break below this price would signal that the upward momentum has faded, and traders could use this as a stop-loss on long positions. Such a move would suggest the pair is entering a consolidation phase rather than continuing its climb.<\/p>\n
We should remember that this currency pair has a history of trending strongly, as we saw when it traded above 7.3000 back in late 2023. If the dollar successfully breaks above 7.1500, the follow-through to 7.1600 could be swift. This historical precedent suggests using derivative strategies with expiries of at least a few weeks to allow the move to fully develop.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD nears 7.1500 resistance; momentum builds but overbought conditions may limit further gains toward 7.1600.<\/p>\n","protected":false},"author":62,"featured_media":16959,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-31280","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/31280","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=31280"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/31280\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16959"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=31280"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=31280"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=31280"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}