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The U.S. Dollar slipped on Monday against a basket of major currencies, dropping to a two-week low versus the Japanese Yen, as positive news about a COVID-19 vaccine and a wave of merger and acquisition deals lifted the mood in global equity markets. The Euro finished higher, but gains were capped as investors continue to react to dovish comments from policymakers on Friday.
On Monday, December U.S. Dollar Index futures settled at 93.060, down 0.278 or -0.30%.
In other news, speculators trimmed net short dollar positions for the second straight week to $32.67 billion, according to Reuters calculations and Commodity Futures Trading Commission data. That’s off nine-year highs of $33.68 billion in late August.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. It turned up last week when buyers took out 93.500, but the rally stalled at 93.640. A trade through 93.640 will signal a resumption of the uptrend. The main trend will change to down on a move through 91.75.
The first minor range is 93.975 to 91.750. Its 50% level at 92.865 is support.
The second minor range is 91.750 to 93.640. Its retracement zone at 92.685 to 92.470 is another support area.
The major support is a Fibonacci level at 91.760. On the upside, the nearest resistance is a 50% level 94.770.
Short-Term Outlook
The support is layered nicely at 92.865 to 92.470. As long as this area holds, the index will have an upside bias. However, we’re not expecting any volatility or a breakout in either direction until after the Fed announcements on Wednesday. Breakouts on low volume usually fail to follow-through in the direction of the move.
For a look at all of today’s economic events, check out our economic calendar.This article was originally posted on FX Empire
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