Insights 
VT 
The US Dollar (USD) is expected to trade between 7.1180 and 7.1310 against the Chinese Yuan (CNH), according to UOB Group’s FX analysts Quek Ser Leang and Peter Chia. They foresee a potential drop to 7.1130, where a clear break could shift attention to 7.1000.
In recent trading, the USD ranged from 7.1161 to 7.1268, closing slightly higher at 7.1268, showing minimal movement. The current focus remains within the 7.1180 to 7.1310 range for today’s trading.
Market Outlook
Over the next 1-3 weeks, the expectation is that the USD could decline further to 7.1130 if it manages to break the current levels. However, this outlook is contingent upon the ‘strong resistance’ level at 7.1400 remaining unbroken.
The FXStreet Insights Team, consisting of journalists, curates market observations from experts and adds insights from various analysts. This provides a broad view of market trends and forecasts.
The USD/CNH exchange rate is expected to trade sideways in a narrow band between 7.1180 and 7.1310 for now. This tight range suggests a period of consolidation before a more decisive move. We believe the underlying pressure is building for a move lower, targeting a drop towards 7.1130 in the coming weeks.
Given this outlook, we are considering buying put options on the USD/CNH pair with strike prices just below the current trading range. A clear break below the 7.1130 level would be the trigger, shifting our focus to the 7.1000 psychological support. This strategy allows us to position for a downward move while keeping our risk defined should the strong resistance at 7.1400 be breached instead.
Economic Indicators
Our bearish view on the dollar is supported by recent economic data, as the latest US inflation numbers for September 2025 came in slightly softer than anticipated. This has led markets to scale back expectations for any further tightening from the Federal Reserve this year. We saw a similar dynamic play out back in late 2023, when signs of cooling inflation led to significant dollar weakness across the board.
On the other side of the pair, sentiment towards the yuan has been improving after China’s Q3 2025 industrial production figures showed surprising resilience, beating market forecasts. The People’s Bank of China has also maintained a steady hand, which has boosted investor confidence. This is a notable shift from the growth concerns that dominated the economic landscape just a couple of years ago.
For traders who are more risk-averse, selling out-of-the-money call spreads could be a prudent strategy. By positioning the short strike above the key 7.1400 resistance level, this trade would profit from the pair remaining range-bound or moving lower. This approach allows us to collect premium while we wait for the anticipated downward trend to take hold.
