Article by ForexTime
Dollar bulls made an unexpected appearance on Tuesday afternoon despite the mood across financial markets improving on revived trade optimism.
Investors seem cautiously optimistic over the United States and China finding some middle ground on trade after Trump said he will meet President Xi Jinping at the G20 summit in late June. While global sentiment could find short term support from this burst of positivity, it does not change the fact that Washington and Beijing have raised tariffs on the other’s goods.
While the Greenback is likely to push higher if talks end up falling apart once again at the G20 summit, the upside could face numerous headwinds. For as long as the Federal Reserve adopts a ‘patient’ stance and speculation lingers over a potential rate cut, the Dollar continues to run on borrowed time.
It is widely known that a candle flickers most violently just before burning out, could this be the story of the Dollar this year? Time will tell.
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Focusing on the technical picture, the Dollar Index is pushing higher on the daily charts with prices trading around 97.30 as of writing. A solid daily close above this point may elevate prices towards 97.50 and 97.90 in the near term.
USDJPY rebounds towards 110.00
The improving market mood reduced appetite for safe-haven assets like the Japanese Yen. An appreciating Dollar compounded to the Yen’s woes with the USDJPY trading around 109.677 as of writing. Price action suggests that the USDJPY may challenge 110.00 in the short to medium term. A solid breakout above this point is likely to open the gates towards 110.70.
Commodity spotlight – Gold
Gold retreated from a month peak above $1300 today as renewed optimism over US-China trade developments sent investors back to global equities and riskier assets. Regardless of recent losses, the precious metal remains bullish on the daily timeframe above $1280. For as long as bulls are able to keep prices above this key support level, Gold has the potential to retest $1300 and beyond.
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Article by ForexTime
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