Insights 
VT 
The US Dollar (USD) is predicted to fluctuate between 7.1220 and 7.1320 against the Chinese Yuan (CNH), according to analysts from UOB Group. There is a potential for the USD to decline to 7.1130 in the near future, and a clear break below this level could potentially shift the focus towards 7.1000.
In the past 24 hours, the USD traded within a narrow range of 7.1230 to 7.1287, without providing any new indications of movement. Analysts maintain their expectation that the USD will continue to trade between 7.1220 and 7.1320, unless the resistance at 7.1400 is reached.
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The global economic landscape continues to undergo rapid changes, influencing currency movements and the decisions of financial institutions worldwide. Traders and analysts are advised to remain informed and consider multiple factors when evaluating the markets.
The USD/CNH currency pair seems stuck in a tight channel, trading quietly between 7.1220 and 7.1320. While the immediate action is sideways, the broader outlook suggests a potential drop towards 7.1130 in the coming weeks. Traders should therefore be cautious of any sudden breaks below the current support level.
On the US side, we see conflicting signals with the S&P Global Composite PMI improving to 54.8, yet an expected Federal Reserve rate cut is looming next week. Recent inflation data from September 2025 showed core CPI cooling to 2.8% year-over-year, which supports the case for the Fed to ease policy despite solid business activity. This dovish outlook is likely capping any significant strength in the US dollar.
The Impact of Economic Data
At the same time, recent data from China supports a stronger yuan, which would push the USD/CNH pair lower. China’s Q3 GDP for 2025 came in at a respectable 4.9%, beating market expectations and suggesting economic stabilization. This, combined with steady industrial output figures for September, adds weight to the view that the yuan has room to appreciate against the dollar.
For the immediate future, with the pair so range-bound, selling volatility using short strangles could be a viable strategy. However, for the next few weeks, we believe the greater opportunity lies to the downside. Buying put options with a strike price near 7.1150 would be a direct way to position for a break below the current range, especially with the Fed decision next week acting as a potential catalyst.
We must remain disciplined and keep an eye on the 7.1400 resistance level. A decisive break above this point would invalidate the bearish outlook and suggest the US dollar has found new strength. As long as we stay below that level, the path of least resistance appears to be lower.
