- The S&P 500 advances to new all-time high on Tuesday.
- Risk-on mood offsets USD weakness.
- US Dollar Index remains on track to close the day at its lowest level since August 9.
Despite the broad-based USD weakness, the USD/JPY pair didn’t have a difficult time preserving its daily gains as the improved market sentiment didn’t allow the JPY to find demand as a safe-haven. At the moment, the pair is trading at 110.40, adding 0.3% on the day.
Heightened optimism surrounding the possibility of the U.S. and China avoiding further trade conflict by reaching an agreement in the talks later this week in Washington helped the major equity indexes start they day on a positive note. The S&P 500 Index extended its rally after opening higher and reached a new record peak at 2873.23. As of writing, the index was a couple of points below that level and was up 0.5% on the day while the Dow Jones Industrial Average was adding 0.45%.
On the other hand, the S&P’s upsurge seems to have triggered a USD sell-off with the US Dollar Index plummeting to 12-day low at 95.10. At the moment, the index is down 0.65% on the day at 95.12.
During the Asian session on Wednesday, the All Industry Activity Index will be released from Japan. The next significant catalyst for the buck will be the FOMC’s August meeting minutes, which is scheduled to be published at 18:00 GMT tomorrow.
Technical levels to consider
The immediate resistance for the pair aligns at 110.35 (100-DMA) ahead of 110.95 (20-DMA) and 111.45 (Aug. 15 high). On the downside, supports could be seen at 110 (psychological level), 109.30 (200-DMA) and 108.65 (May 4 low).
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