Insights 
VT 
The US Dollar (USD) is expected to trade within a range of 7.1590/7.1780 against the Chinese Yuan (CNH). Analysts suggest a slight momentum, indicating a possible move towards 7.1450 in the longer term.
On a 24-hour basis, the USD traded between 7.1624 and 7.1752, closing marginally higher at 7.1720, suggesting limited new insights. Over the next one to three weeks, despite a dip to 7.1527, there has been no marked increase in downward momentum.
Long Term View
There is a maintained view that the USD may edge lower unless the strong resistance level at 7.1950 changes. This information involves risks and uncertainties and is not an investment recommendation.
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As it stands, the US dollar’s recent movement against the offshore Chinese yuan has offered neither drama nor disruption. Trading has stayed mostly boxed in, brushing the upper levels of a relatively narrow range. Occasional dips haven’t pushed the boundaries much, and the market still glances towards that 7.1450 level, though it hasn’t found the strength – or perhaps the reason – to test it decisively.
The narrow band seen this week, just above the 7.16 mark, shows how traders – ourselves included – are contending with a market mostly waiting for something more compelling. A temporary low of 7.1527 was noted, but without persistent volume or push, it failed to trigger follow-through selling.
Resistance and Strategy
What seems clear so far is that the dollar now faces a more pronounced resistance just below 7.20 – 7.1950, to be exact – and until that figure is unseated, any real upward leg seems unlikely. For now, that zone has become a kind of ceiling. Reactions near current levels will likely be reactive rather than decisive.
From our side, this calls for a measured approach. If the goal is exposure to movement in short-term volatility, we might lean towards more cautious positioning. This type of range-bound behaviour often results in time decay for shorter-dated instruments, eating into any premium where there is no matching price action. Accordingly, anything too far from at-the-money lacks efficiency.
That said, the longer-term scenario remains in play: the idea that dollar strength could back off just enough to bring the pair back towards the longer-term support structure around 7.1450 or so. It’s a soft suggestion rather than a full-throated call, as momentum has failed to build in either direction. For us, this means that any positioning for sustained trend activity needs to be both patient and protected.
Options pricing appears to reflect the same hesitancy we see in spot. Implied vols have held steady, not spiralling the way they might if traders were betting on a sustained directional breakout. This does not remove the opportunity; rather, it requires a bit more structure. In other words, flat strategies or delta-neutral spreads could be better suited in this environment, particularly if one’s objective is less about predicting direction and more about squeezing premium out of passivity.
Liability hedges, especially on the corporate side, may find some satisfaction at current levels – neither too strong nor too weak. This isn’t necessarily the time to chase every pip of movement, but instead monitor whether this restrained pattern starts to fray at either edge.
For now, observe the positioning around 7.1950. A breach would shake off the current range-trap and change the tone quite quickly. Until then, we may expect more of the same: nudges lower, no collapse; flutters higher, no rally. That in-between space is where short-term opportunities may lie, provided one isn’t leaning too hard in any single direction. Let the market come to you.
