State of the Market: The US dollar is under pressure of correction

Trades on Tuesday opened with a very low-key dynamics of the US currency against the basket of dignified competitors. Earlier, the American updated the maximum and went to the correction, thereby closing the day in the red. The correction of the dollar was caused by the decline in government yields of the US bonds and growing interest in raw materials, which was the main reason for strengthening of commodity currencies: Canadian, Australian and New Zealand dollars. The weakening of the American against raw materials also caused a sell-off of the dollar against other currencies, thereby provoking a correction in the US dollar.

Stock indices, despite the very positive signals from Wall Street in the Asia-Pacific session, are traded in different directions, which, under conditions of a general decline in the US dollar, may increase pressure on the American. At trades on Tuesday, oil quotes remain near the level of the opening day, maintaining an optimistic sentiments after yesterday’s upward rally.

The dollar index, after updating the annual maximum at around 94.00, continues to decline and is limited to the level of 93.60. In the conditions of preservation of ambiguity in the market from the American the test of support levels is expected at: 93.40 and 93.20. Significant resistance are: 93.80 and 94.00.

Read also the “US Dollar Index as an Indicator”.

Hanzenko Anton