The U.S. Dollar is trading higher against a basket of currencies on Thursday on renewed hopes of a trade deal between the United States and China after the two economic powerhouses agreed to resume trade talks in early September.
Earlier in the session, the greenback was underpinned after China said it wished to resolve its protracted trade dispute with the world’s largest economy with a “calm” attitude.
Later, President Trump said the U.S. and China are set to have talks on Thursday “at a different level.”
As far as the basket of currencies is concerned, the Euro and British Pound were pressured by the news but the Canadian Dollar picked up some strength. Demand for the safe-haven Japanese Yen and Swiss Francs dropped as the events drove investors into higher-risk assets.
In economic news, Preliminary Gross Domestic Product came in as expected at 2.0%, down slightly from the previously reported 2.1%. The Goods Trade Balance was stronger than expected, coming in at -72.3 billion.
Bad news hit the housing industry. Pending Home Sales were down 2.5%. Traders were looking for a small 0.1% gain.
At 16:09 GMT, September U.S. Dollar Index futures are trading 98.370, up 0.250 or +0.26%.
Daily September U.S. Dollar Index
Daily Technical Analysis
The main trend is up according to the daily swing chart. The uptrend will be reaffirmed when buyers take out the main top at 94.455. The main trend will change to down on a trade through 97.370.
The short-term range is 98.700 to 96.980. Its retracement zone at 98.045 to 97.840 is support. Trading on the strong side of this zone is contributing to today’s upside bias.
Daily Technical Forecast
Based on the early price action and the current price at 98.370, the direction of the September U.S. Dollar Index the rest of the session on Thursday is likely to be determined by trader reaction to the downtrending Gann angle at 98.390.
Overcoming 98.390 should lead to a quick test of the main top at 94.455. Taking out this angle could trigger a rally into the next downtrending Gann angle at 98.545. This is the last potential resistance angle before the 98.700 main top.
The inability to overcome 98.390 will signal the presence of sellers. If this creates enough downside momentum then look for a retest of the uptrending Gann angle at 98.120. This angle provided support earlier in the session. Crossing to the weak side of the Fibonacci level at 98.045 will put the index in a bearish position.
This article was originally posted on FX Empire
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