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Dollar dips on NAFTA uncertainty, bears eye 93.50

Article by ForexTime

It was already shaping up to be a negative trading week for the Dollar as easing trade concerns dented the currency’s safe-haven appeal.

Buying sentiment towards the Greenback deteriorated further on Thursday following reports that the US and Canada are unlikely to reach a breakthrough on NAFTA talks this week.  Although the expected uncertainty may support the Dollar, investors seem more concerned about how NAFTA developments may impact the US economy. The initial optimism over the United States having less to lose from trade tensions seems to be wearing off, and this remains one of the factors behind the Dollar’s depreciation. If trade disputes result in slower US economic growth, King Dollar could easily lose its safe-haven status, consequently resulting in further downside.

In regards to the technical picture, the Dollar Index turned bearish on the daily charts after prices tumbled below the 94.00 support level. The classical head and shoulders formation on the daily charts suggest that bears are back in town with the 93.50 acting as the first level of interest.

While the argument for bulls to make a return could be based on the Fed raising interest rates next week, the hike has already been heavily priced in. The Dollar Index remains at threat of sinking towards 93.00 if the central bank expresses concernS over trade tensions impacting growth.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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