The U.S. Dollar is trading higher against a basket of currencies on Friday with most of the gains attributed to a plunge in the Euro, which drove the single-currency into its lowest level since May 2017. The Greenback also posted gains against the Canadian Dollar and British Pound. The safe-haven Japanese Yen was higher on light volume. The Swiss Franc fell sharply due to its close relationship with the Euro Zone economy.
At 19:07 GMT, the September U.S. Dollar Index is trading 98.885, up 0.430 or +0.44%.
The Euro is down 0.68%. The British Pound is off 0.24% and the Canadian Dollar is lower by 0.24%. The Japanese Yen is up 0.23% and the Swiss Franc is off 0.42%.
Poor Euro Zone economic data on Thursday set the tone for a weaker Euro on Friday. The data reinforced views that the ECB would cut its benchmark interest rate and announce a new round of quantitative easing at September’s monetary policy meeting.
Investors were also bailing on the Japanese Yen and Swiss Franc on the hopes China and the United States would make progress toward ending their trade dispute after announcing talks would start on Thursday, September 4.
Analysts also said that U.S. investors were cutting exposure outside the U.S.
Daily Technical Analysis
There is not much to look at on the daily chart because we are in a momentum driven market. The main trend is up. It was reaffirmed on Friday when buyers took out the previous main top at 98.700.
Since resistance doesn’t come in until 100.055, a closing price reversal top will be the likely pattern that signals the re-emergence of sellers. However, this may not even lead to a change in trend. Often this chart pattern only produces a 2 to 3 day correction that is designed to alleviate some of the upside pressure.
A break back under the previous contract high at 98.700 will also be a sign of short-term weakness.
The key Gann angle support on the daily chart comes in at 98.370. This angle from the 97.370 main bottom on August 26 is moving up at a rate of 0.250 per day.
This article was originally posted on FX Empire
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