US-China trade tensions erupted again last week on news US President Trump backs applying tariffs of up to $200B on Chinese goods.
In addition to this, the US and Mexico reached a bilateral trade deal early on in the week, while trade talks with Canada reached its deadline without an agreement.
The US dollar finished the week relatively unchanged (according to the US dollar index, the currency concluded trade marginally in the red, down 0.06%).
In terms of the dollar’s longer-term technical picture, however, price wrapped up the month of August in the shape of a notable bearish pin-bar formation around the top edge of a monthly supply zone at 95.13-92.75.
Meanwhile in other currencies:
- The euro clocked highs of 1.1733 against its US counterpart last week, though struggled to maintain an upside presence amid contagion from TRY selling and US-China trade pressures. Also likely contributing to recent selling was the EUR/USD struck a strong weekly resistance area at 1.1717-1.1862.
- The Australian dollar entered into a strong phase of selling over the course of last week, down a whopping 1.83% against the greenback. Amid weaker-than-expected local data, and on the re-emergence of trade tensions between the US and China, the AUD/USD closed the week out just north of a weekly double-bottom support level at 0.7163.
Although Monday will likely offer a slow start to September with US banks closed in observance of Labor Day, let’s switch over to the charts and see what’s potentially in the offing this week…