The U.S. Dollar weakened against a basket of major currencies on Friday amid uncertainty over a new round of stimulus ahead of the upcoming U.S. elections, with the greenback finishing down nearly 1% for the week.
The dollar is likely to remain rangebound over the next week to 10 days as traders await clarity on the fiscal aid package. Risk that the U.S. presidential election could be contested could also keep investors on the sidelines.
On Friday, December U.S. Dollar Index futures settled at 92.765, down 0.199 or -0.21%.
U.S. House of Representatives Speaker Nancy Pelosi said another round of COVID-19 aid was still possible before the November 3 elections, but that President Donald Trump would have to get reluctant Republicans on board if he wants a deal, Reuters said.
Meanwhile, Trump and Treasury Secretary Steven Mnuchin countered that Pelosi must compromise to get an aid package, saying significant differences remained between the Republican administration and Democrats.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 92.460 will reaffirm the downtrend. The main trend will change to up on a move through 93.925.
The minor range is 91.750 to 94.795. Its 50% level at 93.275 is resistance. This level is controlling the near-term direction of the index.
The short-term range is 97.785 to 91.750. Its retracement zone at 94.785 to 95.500 is resistance. The zone is controlling the longer-term direction of the dollar index.
We’re in a headline driven market, which could create a rangebound trade if the news goes quiet on fiscal stimulus and the election.
If the Dollar Index remains between 91.750 and 94.795 then we could see a choppy, two-sided trade on both side of its pivot at 93.275.
Trading on the strong side of the pivot at 93.275 will indicate the presence of buyers. If this move is able to create enough upside momentum then we could see a test of the resistance cluster at 94.785 – 94.795.
A sustained move under the pivot at 93.275 will signal the presence of sellers. This could lead to a retest of 92.460. This is a potential trigger point for an acceleration to the downside with the next target the September 1 main bottom at 91.750.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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