BUZZ-COMMENT-Where USD closes will have a huge bearing on direction
Jan 24 (Reuters) - Where the U.S. dollar closes at the end of this week is key for its direction for next week and beyond.
U.S. President Donald Trump's latest comments on China tariffs pushed the dollar broadly lower, keeping it on track for its worst weekly fall in two months. Investors have sold the dollar in the wake of Trump's inauguration after his widely expected tariff announcements did not immediately materialise, unlike what he had threatened during his campaign.
The USD index, which tracks the greenback against a basket of six major currencies, on Wednesday could not sustain the drop below the 107.805 Fibo, a 23.6% retrace of the 100.150 to 110.170 (September to January). That raised the prospects of a "bear trap", which is typically a bullish sign, set when a market breaks below a technical level but then quickly reverses.
However, on Friday the USD index has once again slipped under 107.805 Fibo to hit its lowest level since Dec. 18, 2024. If the USD index closes under the 107.805 Fibo, at the close of trading on Friday, that would likely lead to more dollar sales in coming sessions.
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