US Dollar Index under pressure as US-China tension ease

  • Tensions between the US and China over trade war is easing. 
  • The US Dollar index is under pressure as the week starts. 

The US Dollar Index is trading at around 89.09 down 0.46% on the day so far as tensions of a trade war between the US and China seem to somewhat cool off.

The US and China are negotiating trade agreements so that the US can have access to Chinese markets. China is willing to buy more semiconductors from the US in addition to opening up the financial services sector to foreign investment, according to the Financial Times.

The China retaliation to US tariffs should have minimal impact as only a “relatively small part of trade is being impacted and the retaliatory steps seem symbolic”. According to BBH analysts.

New York Federal Reserve Bank President William Dudley has a speech scheduled at 17:30 GMT about regulatory reform at the US Chamber of Commerce while Cleveland Federal Reserve Bank President Loretta Mester will speak about monetary policy at 20:30 GMT.

Earlier the Chicago Fed National Activity came in at 0.88 vs 0.19 expected while the Dallas Fed Manufacturing Index in March came in at 21.4 vs 33.4. 

US Dollar Index weekly chart

Weekly support is seen at 89.00 supply/demand level; followed by 88.25 last cyclical low. On the other hand, weekly resistance is seen at the 90.00 psychological mark, followed by 90.96 last cyclical high. 

US Dollar daily chart

Support is seen at 88.50, previous demand level; followed by 88.25 cyclical low. Resistance is seen at 89.45 supply level and the 90.00 psychological mark. Both Relative Strength Index (RSI) and Movcing Average Convergence/Divergence (MACD) are bearishly configured. 

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