US dollar movement forecasts
On the economic side
The US dollar fell on Tuesday to the levels of 108.50, after yesterday it hit a peak near the levels of 109.90.
The dollar may suffer another decline if the United States and China move to de-escalate their trade dispute, as a new US tariff of 10% on China came into force on Tuesday, and China announced retaliatory tariffs starting from February 10.
Markets seem to be taking into account a good chance that the US and China will make a deal and delay tariffs after Trump agreed to postpone the planned 25% tariffs on Canada and Mexico for a month.
However, the argument in favor of a significant depreciation of the dollar is weak as the threat of tariffs remains.
The current dollar declines are expected to be temporary and then rise again against most currencies.
There is also a good reason to buy the US dollar in February An analysis of the dollar's performance in February since 2000 shows that it has risen in 16 times over the past twenty-five years, including the last eight years in a row.
And on the technical side
The dollar index completed the four-hour Bearish Harmonic Pattern and rebounded from it yesterday and is now trying to reach uptrend levels and a strong support zone near the levels of 108.15/00, from which we can buy the US dollar against most major currencies.
We are targeting the levels of 108.70 and then 109.50.
This scenario fails if the 107.50 levels break down.
