US Dollar Flat As Traders Weigh China’s Retaliation Over US Tariffs
The US Dollar Index (DXY), which tracks the US dollar against a basket of six major currencies, was looking downbeat on Tuesday after first hitting 109.00 before falling back to a lower 108.37 level in European trade. The DXY was trading around 108.50 at the time of writing. Markets reacted to a mix of headlines with relief from Mexico and Canada, which saw the imposition of US tariffs delayed. Meanwhile, China has retaliated against US President Trump’s tariffs by issuing its own levies on US imports.
The economic data calendar is taking shape ahead of Friday’s Nonfarm Payrolls data. The US JOLTS Job Openings report is due later in the day and could provide more insight into the tightness of the labor market. Additionally, two Federal Reserve (Fed) speakers, Atlanta Fed President Raphael Bostic and San Francisco Fed President Mary Daly, are due to speak and may have comments for markets to consider.
The US Dollar Index (DXY) is moving erratically, though moving quickly, not going anywhere at all. Its range is set at 107.00 on the downside and 110.00 on the upside. It is expected that the DXY will remain within the trading range between these two larger levels for now.
On the upside, the first barrier at 109.30 (July 14, 2022, high and uptrend line) was briefly breached but did not hold on Monday. Once that level is recaptured, the next level to reach before moving higher remains at 110.79 (September 7, 2022, high).
On the downside, the 55-day Simple Moving Average (SMA) at 107.75 and the October 3, 2023, high of 107.35 act as double support for the DXY price. For now, that support seems to be holding, although the Relative Strength Index (RSI) still has room to fall. Therefore, look for 106.52 or even 105.89 as a better level.(Newsmaker23)
Source: FXstreet
