The USD Weighed Down on Trade Developments
Rowan Crosby • 1 min read
The USD is looking like opening a little lower this week as the trade developments on the weekend encourage a risk-on mode.
By now, I’m sure most of you are aware that the US and China are working towards a deal on trade. This is a positive step forward and one that should see markets open higher across the board.
In Asian trade, we are already seeing equities pushing higher and the AUD/USD and NZD/USD firmly in the green.
This week, being the first week of the month, means that much of the attention will again be on the non-farm payroll data on Friday. That will come into focus a bit later in the week after the dust has finally settled on the weekend news.
The USD Outlook
The DXY once again is right on the resistance level at 97.00.
For now 97.00 is support with R1 at 97.70-80 while S2 remains at 96.00-20.
As you can see on the chart, price is starting to really coil around this 97.00 price point and when that happens we can sometimes get a decent breakout one way or another.
There are a few bearish points for the USD now, particularly a dovish outlook from the FED and now a trade deal. So there could be a slight fundamental bias in the short-term to the downside.