The US Dollar (USD) is predicted to recover to 6.9805 against the Chinese Yuan (CNH), but a sustained increase seems doubtful. Analysts suggest that oversold conditions and decreasing momentum may limit the downside to 6.9590. Last Friday, the USD hit a low of 6.9662, closing almost unchanged at 6.9709. Early Asian trading indicates a possible rise towards 6.9805, with support levels at 6.9690 and 6.9650.<\/p>\n
In the one-to-three-week view, a sharp decline recorded last month is thought to be stretched. Despite no firm signs of stabilisation, oversold conditions suggest limited downside risk to 6.9590. Conversely, a break above 6.9950 may signal stabilisation of USD’s weakness. The insights are part of FXStreet’s analysis, which includes external expert opinions.<\/p>\n
The current market environment is impacted by various factors, such as weak US data and geopolitical concerns. Other related market movements involve the USD\/JPY dropping due to weak US manufacturing data and rising Japanese yields, while GBP has strengthened due to geopolitical flows supporting Sterling. Additionally, economic events impacting other currencies and markets highlight the complex landscape in which USD\/CNH movements are occurring.<\/p>\n
We see the recent fall in USD\/CNH as overdone, creating a tactical opportunity for the coming weeks. The pair looks deeply oversold after the sharp decline in December 2025, suggesting limited further downside toward 6.9590. Given that China\u2019s own official Manufacturing PMI for December unexpectedly dipped to 49.0, we feel a short-term recovery toward 6.9805 is probable.<\/p>\n
The weak US ISM Manufacturing print of 47.9 is a significant red flag for the dollar’s strength. This contractionary signal, which is now the third consecutive month below the 50.0 threshold, suggests we should be cautious about any broad-based USD recovery. It may be prudent to use options to sell USD rallies against currencies like the British Pound, which has already reclaimed the 1.3500 handle.<\/p>\n
Given the developing situation in Venezuela, we expect market volatility to remain elevated. The CBOE Volatility Index (VIX) has already jumped to 21.5 over the weekend, reflecting rising uncertainty in equity markets. This environment strongly supports holding long positions in traditional safe-haven assets like gold and the Japanese yen through futures or exchange-traded funds.<\/p>\n
The cryptocurrency market is notably detaching from traditional risk-off sentiment, driven by its own internal dynamics. Net inflows of over $500 million into spot Bitcoin ETFs last week confirm this strong institutional interest is continuing into the new year. We should therefore consider crypto as a separate momentum play, potentially using call options on BTC and ETH to capture further upside.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD may rebound to 6.9805 against CNH, but sustained gains unlikely amid oversold conditions and weak momentum.<\/p>\n","protected":false},"author":62,"featured_media":16960,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38277","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\/38277","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=38277"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38277\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16960"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}