Insights 
VT 
The slight increase in upward momentum of the US Dollar (USD) against the Chinese Yuan (CNH) might lead to a higher trading range between 7.1220 and 7.1340, rather than a sustained advance. UOB Group analysts believe there is a chance for the USD to test the 7.1370 level, although sustained momentum is not yet evident.
In a 24-hour view, expectations were that the USD might edge above 7.1280 but would not sustain above this level. The USD reached a high of 7.1290 and closed at 7.1265, reflecting only a slight increase in momentum.
Analysis Over A 1-3 Weeks View
Over a 1-3 weeks view, upward momentum is increasing but is insufficient for a sustained advance. The USD needs to close above 7.1280 to move towards 7.1370, as long as it does not fall below 7.1020. A close above 7.1280 remains favourable but not decisive, with a subsequent closing at 7.1265. Should the USD break below 7.1140, the current mild upward pressure would likely ease.
We see mild upward pressure on the US dollar against the yuan, creating a potential opportunity in the coming weeks. Traders might consider buying short-term call options targeting the 7.1370 level. This view is supported by the recent US jobs report, which showed a surprise gain of 210,000 jobs in October 2025, suggesting the Federal Reserve may delay rate cuts.
The case for a stronger dollar is reinforced by recent data from China. Last week’s Caixin Manufacturing PMI for October 2025 unexpectedly dipped to 49.8, indicating a slight contraction and fueling speculation that the PBoC will maintain its accommodative policy stance. This policy divergence between the US and China typically favors a higher USD/CNH.
Strategic Approach And Recommendations
A strategic approach would be to wait for a decisive daily close above 7.1280 to confirm the upward momentum before entering new positions. This level acts as a key trigger for the move towards 7.1370. Conversely, we would see the current upward pressure ease if the pair breaks below the 7.1140 support level.
Looking back, we saw a similar pattern in late 2023 when USD/CNH grinded higher before facing significant resistance above the 7.15 level. The current analysis does not suggest a sustained, sharp advance, so using options strategies that benefit from a gradual rise appears prudent. This manages risk in what is expected to be a controlled upward drift.
