Insights 
VT 
The US Dollar (USD) has scope to edge above 7.1280 against the Chinese Yuan (CNH). However, maintaining a position above this level may be challenging. Analysts from UOB Group suggest an upward move requires closing above 7.1280, potentially targeting 7.1370.
Recent analysis suggests the USD/CNH upward momentum is slightly increasing. On a 24-hour view, USD could edge past 7.1280, but sustaining above it may not occur. A drop to 7.1160 or 7.1100 is possible. In the next one to three weeks, a previously negative outlook has been revised to neutral. The USD’s stability is anticipated between 7.0920 and 7.1280, needing a close above 7.1280 for further advances. As long as 7.1020 is not breached, the chance for a close above 7.1280 remains.
Other Market Updates
Other market updates include gold remaining range-bound above $4,000 due to US Dollar strength and Fed caution. The EUR/USD holds near three-month lows, while AUD/USD declines before a Reserve Bank of Australia policy meeting. Globally, risk sentiment is wary due to economic events, with meme coins like Dogecoin experiencing downturns as interest decreases. Cardano (ADA) sees a 6% price slip and a bearish trend.
We are seeing upward momentum build for the US Dollar against the Chinese Yuan, but a sustained advance is not yet certain. For the coming weeks, traders should watch the 7.1280 level closely, as a daily close above this mark would be the signal for a potential move toward 7.1370. Until then, any push above 7.1280 is likely to be temporary, with key support holding at 7.1020.
This view is strengthened by recent economic data out of China. The Caixin Manufacturing PMI released for October 2025 came in at 50.1, indicating only marginal expansion and a slight slowdown from the previous month. This weaker industrial outlook gives the People’s Bank of China reason to maintain a looser policy stance, which can weigh on the Yuan.
Meanwhile, the US Dollar remains firm despite a weaker-than-expected ISM Manufacturing PMI of 48.7. The market appears more focused on the relatively strong US labor market, as the October non-farm payrolls report from last Friday showed a resilient 210,000 jobs were added. This divergence reinforces the idea that the Federal Reserve will hold interest rates higher for longer compared to its global peers.
Options Strategy and Currency Pressures
Given the uncertainty around the key 7.1280 resistance level, a defined-risk options strategy could be prudent. We believe a bull call spread on USD/CNH, perhaps buying the 7.1300 call and selling the 7.1400 call, offers an effective way to position for a potential breakout. This strategy would capitalize on a move higher while limiting the upfront cost and potential loss if the resistance holds.
The dollar’s strength is pressuring other major currencies, with EUR/USD trading near three-month lows around 1.1520. Looking back, we see a clear policy divergence that began solidifying in mid-2025, as inflation in the Eurozone cooled faster than in the United States. Recent Eurozone CPI data for October 2025 registered at 2.2%, increasing speculation that the European Central Bank may be in a position to cut rates before the Fed.
Gold is also feeling the effects, remaining capped even at its historically high level above $4,000 per ounce. We remember the powerful rally from the sub-$2,000 levels seen back in 2023, which was fueled by inflationary fears. Now, in late 2025, the high interest rate environment makes holding a non-yielding asset like gold expensive, limiting its upside despite ongoing geopolitical uncertainty.
