US Dollar ekes out more losses amid tit-for-tat trade war
NEW YORK (March 4) The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, makes another leg lower on Tuesday after United States (US) President Donald Trump confirmed that tariffs on Canada, Mexico and China were not being delayed. Markets were still doubting on Monday if President Trump would still allow an extension just before the deadline. However, it was no surprise that the US imposed the earlier committed tariffs.
Meanwhile, Canada and China have already pushed back on the US unilateral tariffs. Later Monday night, Canada’s Prime Minister Justin Trudeau announced retaliatory tariffs on US goods. “Canada will start with 25% tariffs on US imports worth C$30 billion from Tuesday,” read the statement, while tariffs on other C$125 billion of products will come into effect in 21 days.
Technical Analysis: New highs around the corner?
Bullion extends its Monday’s gains at the start of the European trading session on Tuesday. Ranges have become tighter for the daily Pivot Point levels, confirming the current indecision among investors after last week’s decline. Watch out for a continuation in any direction. However, uncertainty about a tit-for-tat trade war will see Gold being supported.
The daily Pivot Point at $2,879 and the daily R1 resistance at $2,903 are currently providing support to bounce off from and attempt to push Bullion higher. In case Gold has enough oomph to continue higher, the daily R2 resistance at $2,917 will possibly be the final cap on Tuesday ahead of the all-time high of $2,956 reached on February 24.
On the downside, apart from the abovementioned Pivot Point and the R1 resistance levels, the S1 support at $2,866 converges with Thursday’s low. That will be the vital support for this Tuesday. If Bullion bulls want to avoid another leg lower, that level must hold. Further down, the daily S2 support at $2,842 should be able to catch any additional downside pressure.
FXStreet
