The US Dollar (USD) may continue to weaken against the Chinese Yuan (CNH), with the major support level at 7.1700 being currently out of reach. There is, however, another support level at 7.1840, with resistance levels at 7.2100 and 7.2180.

In the short term, the USD experienced a decline, closing at 7.1993. Over a broader timescale, renewed downward momentum implies that a revisit to the 7.1700 level may occur.

Corrective Phase Of The US Dollar

Previously, the USD was expected to range-trade with a target of 7.1700. Initially, downward momentum decreased, but a recovery is now suggested. The strong resistance level has adjusted from 7.2600 to 7.2420, indicating potential changes in trading dynamics.

This analysis suggests that the US Dollar is currently in a corrective phase against the Yuan, gradually easing from its earlier strength. The short-term slide below 7.2000, landing it at 7.1993, signals a hesitance in buying interest at these levels. While previous moves hinted at consolidation, recent action implies a shift—momentum is tipping back in favour of weaker dollar positions, though not aggressively so.

Support at 7.1840 appears to be the next line to test if the pressure continues. It’s not implausible for the pair to slowly gravitate towards 7.1700 again, especially given the lack of urgency seen in recent recovery attempts. That former lower target sits just below where the market seems to be comfortable in the current environment, making a retreat to that level possible if selling resumes modestly.

The earlier resistance, once set higher near 7.2600, has now been brought down to 7.2420. This revision reflects that recent rallies have lacked momentum. The pair has struggled to break past its nearer hurdles, highlighting hesitance or a cap in upside enthusiasm. That revision should not be ignored—it shows where the ceiling might be if there is a bounce.

Strategic Resistance And Support Levels

It would be reasonable now to treat any rise into that resistance zone as an opportunity to re-examine positions, especially since the failure to maintain strength above 7.2100 has become more apparent. That level, coinciding with our recalibrated resistance area, may continue to act as a roadblock unless there’s a marked shift either from a fundamental injection or speculative drive.

Two things stand out. First, the reversal from expectations of a range-bound movement toward a recovery phase suggests momentum trading may be more effective than range setups for now. Second, the narrowing of resistance tells us that topside attempts are likely to meet friction sooner than before, giving us clearer points of invalidation.

We might do well to treat the current narrow range—with resistance at 7.2180 and support at 7.1840—as a short-term battle zone. Moves outside it would either confirm continued weakening of the dollar or herald a small relief reversal. With downside support holding for now, but not yet convincingly, any inaction may favour the gradual bleed lower. Keep an eye on volume and daily closes—price alone isn’t the whole story anymore.

Timing remains everything. If momentum stalls near 7.2100 again, it may set up a rolling reversal pattern. That, combined with muted recovery highs, continues to set the tone rather than trigger large-scale changes. Positions should reflect that—it’s not about chasing, but about reacting. It’s best to stay nimble—with enough room above resistance and below support to manage risk intelligently.

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