Dollar weakens broadly as new tariff threats shake markets

Fresh flows into safe-haven assets followed President Trump’s latest signals about additional tariffs on several EU countries, weakening market sentiment and adding pressure on the US dollar.

The dollar index opened roughly 40 points lower on Monday and dropped to a five-day low, leaving room for a deeper correction of the $97.39/$99.27 upleg.

The fading bullish momentum, combined with declining RSI and Stochastic readings on the daily chart, points to further easing. Stochastics also showed a bearish divergence, signaling a stall in the recent rally. In addition, a double bull-trap near the $99.20 Fibonacci resistance adds to downside risks. However, sustained weakness needs to clear key support at the $98.83/$98.73 zone (Fibonacci 23.6% retracement of the $97.39/$99.27 range, daily Tenkan-sen, and cloud base) to validate the signal and trigger fresh downside acceleration. The next Fibonacci supports lie at $98.55 (38.2%), $98.33 (50%), and $98.11 (61.8%).

The fragile political environment and the threat of further escalation over the EU’s response to Trump’s tariffs also weigh on the dollar. Still, bullish technical cues—such as the diverging daily Tenkan/Kijun-sen after forming a bull-cross and the 100/200 DMAs converging toward a potential golden cross—may partially cap losses.

Res: 98.79; 99.00; 99.30; 99.63
Sup: 98.73; 98.55; 98.33; 98.11