During a speech at the Boao economic forum (Chinese Davos), President Xi announced the further opening of the Chinese economy and the reduction of some import duties with the specification of cars. Xi added that China does not strive to maintain a trade surplus, but is more interested in providing competitive products for the Chinese population. The president declared the opening of some sectors for foreign capital. Speech is a nice turnaround in an ongoing US trade dispute, and it also appears a few hours after President Trump on Twitter expressed his dissatisfaction with high tariffs on imported cars to China. It seems, therefore, that today the risk of the currency war has diminished, which the markets welcome. On FX, AUD and NZD rallies, as well as JPY sell-offs, is a typical response. The only question is whether China's movement will replace Trump's protectionist and anti-globalization. And if Trump receives Xi's speech as his success, or as a loss of control over the playing field - President Xi showed himself as a sensible player whos (so far empty) declarations throw cards out of Trump's hand.
Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The bulls have managed to break out above the technical resistance at the level of 90.47 twice, but the price was pushed back down eventually. Currently, the market has broken below the technical support at the level of 90.18 and is heading lower towards the level of 89.63. The good news is the market conditions are about to enter the oversold zones, so there is still a chance for a corrective bounce towards the level of 90.18 or higher. The key mid-term technical support is still located at the level of 88.26.
