The dollar was sharply lower in Asia and early Europe on Tuesday (down 0.7% so far) and hit the lowest in more than one week, on surge through pivotal supports at 113.37 and 112.96 (Fibo 38.2% and 61.8% respectively of 112.30/114.03 upleg.
Fall in US Treasuries pulled the dollar lower, as hopes of firmer agreement between the US and China after two presidents agreed to put the conflict on hold, are fading.
The most recent comments from various officials from Trump’s administration, which signaled little optimism over US/China agreement, added to negative outlook.
Fresh weakness generated negative signals on break below Fibo pivots, as well as plethora of daily MA’s, turning near-term structure bearish and increasing risk of further losses.
Bears pressure supports at 112.71 (Fibo 76.4%) and 112.55 (daily cloud top) violation of which would expose key points at 112.30 (20 Nov trough) and 112.16 (daily cloud base).
Rising bearish momentum on daily chart and south-heading indicators support scenario.
Broken MA’s now act as resistances, staring with 55SMA (113.03), then 113.17 (30SMA) and 113.34 (10SMA).
Only break and close above the latter would sideline immediate downside risk.
Res: 113.03, 113.17, 113.34, 113.65
Sup: 112.71, 112.55, 112.30, 112.16
