The U.S. Dollar is trading lower against a basket of major currencies on Tuesday on lower demand for higher-yielding assets as global equity markets fell for a second session. Caution over a December 15 deadline for the next round of U.S. tariffs on Chinese imports weakened risk appetite and limited outsize market moves.
Market uncertainty before the tariff deadline was reinforced by comments from U.S. Agricultural Secretary Sonny Perdue on Monday, who said President Donald Trump did not want to implement tariffs but did want to see “movement” from China.
The deadline looms over a series of events this week, with markets also awaiting the UK election on Thursday and U.S. and European Central Bank meetings.
At 09:28 GMT, December U.S. Dollar Index futures are trading 97.570, down 0.039 or -0.04%.
Against the currencies in the basket, the U.S. Dollar is losing ground to the Euro, British Pound and the safe-haven Japanese Yen and Swiss Franc. The greenback is edging slightly higher against the Canadian Dollar.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through 98.495 will change the main trend to up.
On Friday, the index formed a potentially bullish closing price reversal bottom at 97.200, however, since buyers didn’t follow-through to the upside, the momentum never shifted to up. A trade through 97.815 will confirm the reversal bottom. A move through 97.200 will signal a resumption of the downtrend.
The short-term range is 98.495 to 97.200. Its retracement zone at 97.850 to 98.000 is the first upside target. Since the main trend is down, sellers are likely to come in on a test of this area.
On the downside, the major support zone is 97.140 to 96.630.
Daily Technical Forecast
Based on the early price action and the current price at 97.570, the direction of the December U.S. Dollar Index the rest of the session on Tuesday is likely to be determined by trader reaction to the downtrending Gann angle at 97.620.
A sustained move under 97.620 will indicate the presence of sellers. The first target is an uptrending Gann angle at 97.430. If this fails then look for a potential acceleration to the downside with the next targets lined up at 97.200, 97.160 and 97.140.
A sustained move over 97.620 will signal the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the short-term 50% level at 97.850.
This article was originally posted on FX Empire
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