Insights 
VT 
The US Dollar (USD) could trade within a range of 7.1190 to 7.1300 against the Chinese Yuan (CNH). Analysts suggest that if USD falls below 7.1130, the next target could be 7.1000.
In a recent report, the USD experienced a tight trading range, closing nearly unchanged at 7.1242. The forecast remains intact as long as the resistance level at 7.1400 is not exceeded.
FXStreet Insights Team
FXStreet Insights Team compiles analysis from various financial experts. This includes general market observations as well as specific notes by commercial analysts.
USD movements are among diverse market topics covered in newsletters and articles, catering to informed decision-making. Other topics include recent trends in gold, Canadian CPI data, and global oil imports.
FXStreet stresses that the provided information should not be taken as investment advice. Investors are encouraged to conduct thorough research and acknowledge potential risks before making financial decisions.
Given the view that the USD/CNH will likely trade within a tight 7.1190 to 7.1300 range, we believe option selling strategies are appropriate for the immediate term. Writing short strangles with strikes outside this range could allow traders to collect premium while the pair consolidates. The low volatility environment makes this an attractive way to generate income.
Bearish Case and Positioning
We see a stronger case for a downward move toward 7.1130, and traders should consider positioning for this potential breakdown. Buying put options or establishing bear put spreads with a target around this level offers a clear, risk-defined way to profit if support gives way. This strategy becomes more compelling as long as the pair remains below the key resistance level of 7.1400.
This bearish outlook is supported by recent economic data released in October 2025. China’s Q3 GDP figures showed resilient growth at 4.9%, beating market consensus and signaling a stabilizing economy. Furthermore, the People’s Bank of China has consistently set a stronger-than-expected daily reference rate, guiding the yuan firmer.
On the other side of the pair, recent US inflation data for September 2025 came in at 2.8%, reinforcing the market’s view that the Federal Reserve will remain on hold through the end of the year. This lack of upward pressure on US interest rates removes a key pillar of dollar strength. This contrasts sharply with the policy divergence we observed back in 2023, which drove the dollar significantly higher.
The 7.1400 resistance level is critical for risk management. A decisive break above this point would invalidate the bearish thesis. Traders could use this level to set stop-losses on short positions or as a trigger to unwind bearish option structures.
The current tight range has compressed implied volatility, making options relatively cheap. For those anticipating a significant move but unsure of the direction, a long straddle could be a viable strategy. This would profit from a sharp breakout below 7.1190 or above 7.1300, capitalizing on an eventual return to higher volatility.
