The US Dollar saw a small increase after Trump’s threats of new tariffs but fell again as markets adjusted. The DXY index dropped to 98.03, showing ongoing weakness in the currency. Trump’s proposal includes a 50% tax on goods from the EU and a 25% tax on iPhones made outside America. These tariffs are set to start by July 9 and could impact smartphone makers like Samsung. The uncertainty surrounding these tariffs raises concerns about US economic policy and fiscal health.

Market Uncertainty and Trends

It’s unclear whether the new tariffs will add to existing ones or replace them. The market is showing weakening momentum for the US Dollar, with the daily RSI dropping. Possible support levels are at 97.90 and 97.40, while resistance points are at 99.10 and 100.80. The US market is closed for Memorial Day, which affects trading activity. It’s important to remember that this information involves risks and does not offer buying or selling advice. Always do your own research before making financial choices, as all risks and costs lie with the individual. Although the US dollar briefly rose after Trump’s tariff announcements, this increase was short-lived. The dollar weakened again as the market moved past initial reactions. With the DXY index now at 98.03, there is a clear trend of reduced buying momentum, likely due to fading confidence and worries about fiscal stability. Trump’s threats—specifically the imposition of a 50% duty on EU goods and a 25% tax on foreign iPhones—are fueling doubts about future trade policies. If these tariffs are enforced by July 9, major electronics manufacturers could feel the impact. While these statements may appeal to domestic manufacturing interests, the effects are already noticeable, as investors begin to price in concerns about stable trade governance.

Uncertainties in Tariff Implementation

Adding to the complexity is the ambiguity about how these tariffs will be applied—will they stack on top of existing tariffs or replace them? This uncertainty prevents any easy assumptions. We’re seeing the daily RSI decline, suggesting less energy behind recent moves. Current trends show diminishing interest in holding long positions. Key support levels are around 97.90 and again at 97.40, which we should watch carefully, especially if new data worsens market conditions. Resistance is further away at 99.10 and 100.80, which may attract selling pressure if prices temporarily rise. The US market’s closure for Memorial Day has reduced liquidity, meaning trading volumes are thinner and could amplify day-to-day volatility. While this doesn’t change the overall trend, it does mean that quick moves may not reflect the true market situation. Anyone with short-term positions or options based on USD performance should consider these factors in their daily strategies. With increasing political noise and unresolved trade and fiscal questions, recent market movements indicate a shift in sentiment. The ongoing decline suggests that this weakening trend could continue without a significant reason to reverse. We’re not making trading decisions solely based on news, but when the patterns and historical data align so clearly, we can’t overlook them. It’s vital to adjust expectations moving forward. There is a lack of clear information on the policy timeline, and short-term strategies may face challenges. Managing exposure becomes crucial, especially with tariff deadlines approaching and the market’s liquidity lower than usual. For now, the underlying factors indicate that the dollar’s weakness isn’t over yet. It’s essential to carefully assess risk versus reward. Create your live VT Markets account and start trading now.

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