The dollar dips slightly as traders await the initial results from the U.S. election

The dollar edged lower on Tuesday as traders cautiously reduced their exposure ahead of the initial results from the U.S. election.

A fresh dip tested Monday’s low of 103.45, though downside momentum remained limited, as bears struggled to gain traction. Monday’s initial negative sentiment, seen in the gap-lower opening, has so far proven short-lived.

Repeated failure to secure a decisive break below the 200-day moving average (103.62) suggests that the broader bullish trend remains intact, although action is expected to stay subdued until the first election results, likely to be the main catalyst.

Technical indicators on the daily chart remain mixed; while the dollar continues to lose momentum, holding above the 103.62/40 support zone (where the 20 and 200 DMAs are set to form a golden cross) would reinforce the broader bullish outlook and could signal a potential bear trap formation.

A deeper correction of the 99.84 to 104.50 rally may be on the horizon if there is a close below the 103.62/40 area, bringing support levels at 102.79/72 (the 100 DMA and 38.2% Fibonacci retracement) into focus.

Conversely, sustained rejection at the 200 DMA would reduce downside risk, with a lift and close above the daily Tenkan-sen at 103.97 helping to ease pressure and potentially target the key barriers at 104.25/50.

Res: 103.86; 103.97; 104.25; 104.50
Sup: 103.40; 103.00; 102.72; 102.24