The US dollar is “infected with COVID-19”，fell below 93.5, hit two-week low (With trading strategy)

The dollar was softer against riskier currencies on Tuesday on rising optimism that U.S. lawmakers could agree on new stimulus to blunt the economic impact of the coronavirus.

Risk appetite also improved after U.S. President Donald Trump left the hospital and returned to the White House following treatment for COVID-19.

The U.S. dollar fell in early Asian trade on Tuesday, at 11:30 (GMT+8), the U.S. dollar index fell by 0.15% to 93.403, the lowest since Sept. 21.

The president returned to the White House on Monday after a three-night hospital stay for COVID-19 treatment though White House.

White House Chief of Staff Mark Meadows said there is still potential for an agreement among lawmakers in Washington on more economic relief, and that Trump is committed to getting the deal done.

 "There is definitely some more optimism around fiscal stimulus coming down the pike," said Erik Nelson, a macro strategist at Wells Fargo in New York.

 "We think that the prospects for stimulus before the election are still very low," Nelson said. "We're of the view that we should fade this dollar weakness we're seeing today, and in particular against some of

these higher-risk currencies like the Norwegian krone or the Australian dollar."

 "There isn't a clear consensus on how the dollar should trade on this degree of political uncertainty in the U.S.," said Jane Foley, senior F.X. strategist at Rabobank.

On Tuesday, the EUR/USD gained 0.087% to 1.1795, the highest since Sept. 21. 

Eurozone PMI Manufacturing was finalized at 53.7 in September, up from August's 51.7. Growth in the region was led by a strong manufacturing upturn in Germany. 

GBP/USD gained 0.106% to 1.2995 on Tuesday. 

British Prime Minister Boris Johnson and the head of the E.U.'s executive, Ursula von der Leyen, agreed in a phone call on Saturday to step up Brexit talks to close "significant gaps" barring a new trade partnership.

The U.S. Federal Reserve will release minutes from its September meeting on Wednesday, and the European Central Bank will release its latest meeting minutes on Thursday.

Trading Strategy (source: Trading Central)

Pivot: 1.1770

Our preference: long positions above 1.1770 with targets at 1.1800 & 1.1815 in extension.

Alternative scenario: below 1.1770 look for further downside with 1.1750 & 1.1735 as targets.

Comment: technically the RSI is above its neutrality area at 50.

Supports and resistances:

1.1830

1.1815

1.1800

1.1791 Last

1.1770

1.1750

1.1735

Pivot: 1.2960

Our preference: long positions above 1.2960 with targets at 1.3010 & 1.3035 in extension.

Alternative scenario: below 1.2960 look for further downside with 1.2935 & 1.2900 as targets.

Comment: the break above 1.2960 is a positive signal that has opened a path to 1.3010.

Supports and resistances:

1.3065

1.3035

1.3010

1.2987 Last

1.2960

1.2935

1.2900

Guideline for Trading Central strategy 

Trend chart reading guideline

1. First look at the time period in the upper left corner of the chart: ·30MIN and 1H chart shows the trading suggestions for intraday ·Daily chart shows the market trend analysis in next 2-3 days

2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.

3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators: Blue line is RSI, Red line is 9MA;

4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.

How to use TC strategy？

1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell. 

2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.

3. [Alternative scenario] is the plan B for your reference. 

4. [Comment] is the technical analysis of market trends and technical support for trading strategies. 

5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.

Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.