The euro was almost flat at $1.1601 (EUR=). It advanced about 0.4 percent during the previous session, helped in part by an easing in concerns over Italian debt.
Against sterling, the single currency traded at 88.94 pence (EURGBP=D3) after slipping to a fresh one-month low of 88.91.
The dollar index (DXY), which tracks the greenback against a basket of six currencies, was nearly flat at 95.140, after losing 0.2 percent overnight.
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• US DOLLAR INDEX ELLIOTT WAVE ANALYSIS
US Dollar Index has been trading sideways for the past couple of weeks. My analysis on the current Elliott Wave count for dollar index is that we are in a corrective (b) wave higher. We may see a test of 96 then anticipate another strong leg lower to 91-93.
The bearish view is valid so long as dollar index holds below 96.98
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• EURUSD ELLIOTT WAVE CHART POINTS TO MULTI-MONTH RALLY
Since August 20, we have been anticipating a multi-month rally in EURUSD as the Elliott Wave from February 2018 concludes. At this stage of the chart, it appears this EURUSD rally is not over. In the short term, I would not be surprised to see EURUSD drop to below 1.1530, possibly into the 1.1450-1.1500 zone. From there, we will look for bullish signals on a proposed rally above1.1750 towards 1.20.
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• EUR/USD Technical Analysis: Euro losses momentum and turns to the downside
The pair bounced after finding support at the key 1.1520/30 support area. The rebound was not strong enough to remove bearish short-term signals.
A consolidation on top of 1.1600 could lead to a test of the dynamic resistance currently at 1.1635/40 (downtrend line from August highs) and above that area more gains are seen.
The current bias still favors the downside with the price below key MA in the 4 hours chart, but a break below 1.1520/30 is needed over the coming sessions to clear the way to more losses.
Ahead of the Asian session, the bearish tone is likely to prevail while under 1.1605 and the immediate support for the euro is located around 1.1570.
• Eric Fishwick, CLSA's head of economic research, said the trade war may well "have the perverse reaction" of encouraging China to build its political and economic influence.
The ongoing tariffs battle between Washington and Beijing, he said, isn't just about Americans buying too many Chinese goods: It's also because the U.S. is uncomfortable with China's growing power.
• Christopher Wood, an equity strategist at investment group CLSA, said that in the last decade, the central banks have been the key driver of markets.
The "great thing" about that situation was that they were "doing their best to be entirely predictable," he told CNBC at the 2018 CLSA Investors' Forum in Hong Kong.
"In the last 12 to 18 months, the game's changed. The central banks are no longer the key driver ... the key driver is politics," Wood said.
• With congressional elections looming, Republicans in the U.S. House of Representatives on Monday proposed more deficit-expanding tax cuts, an effort seen by some tax experts as unlikely to become law and geared chiefly toward winning votes.
• A group composed of Russian and Chinese businesses is considering 73 joint investment projects cumulatively worth more than $100 billion, according to a Tuesday statement.
Cooperation between China and Russia is an issue of global importance as both nations try to achieve economic stability despite the pain of U.S. penalties — sanctions against Russia, and an escalating tariff war against China. Beijing and Moscow have had a rocky relationship, but the two governments have publicly sought closer ties in recent years.
• U.S. tariffs on Chinese goods are going to lead to a "substantial improvement" between China and its neighbor Russia, the former People's Bank of China (PBOC) Governor Zhou Xiaochuan told CNBC Tuesday.
• Chinese President Xi Jinping arrived in Russia on Tuesday to attend the forum for the first time, at the invitation of Russian President Vladimir Putin. The two superpower leaders will hold talks at the forum, marking their third meeting this year and increasingly close diplomatic relations.
• A plan by eurosceptics in Prime Minister Theresa May’s party to publish an alternative plan for the United Kingdom’s future relationship with the European Union has fallen apart, the Financial Times reported on Tuesday.
The United Kingdom is due to leave the European Union on March 29, yet little is clear: There is, so far, no full exit deal, rivals to Prime Minister Theresa May are circling and some lawmakers are pushing for a rerun of the 2016 referendum.
• U.S. oil exports to Japan and South Korea will rise to record highs this month as Asian refiners take advantage of the steep discounts American sellers are offering after losing Chinese customers amid the trade dispute between Washington and Beijing.
Ship tracking data in Thomson Reuters Eikon showed that oil exports from the United States to South Korea in September will rise to a record average of at least 230,000 barrels per day (bpd). U.S. shipments to Japan will also rise to a record average of at least 134,000 bpd, the data showed.
• U.S. sanctions on Iran's energy industry, when they come into effect in November, could potentially drive oil prices above $100 per barrel, according to an industry expert.
U.S. West Texas Intermediate crude oil futures traded at about $68 per barrel on Tuesday, while Brent crude futures sat at nearly $78.
• Oil prices rose on Tuesday amid looming U.S. sanctions against Iran’s petroleum industry, despite efforts by Washington to get other major suppliers to make up for the expected disruption.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $67.70 per barrel at 0637 GMT, up 65 cents, or 0.2 percent from their last settlement.
Brent crude futures LCOc1 climbed 38 cents, or 0.5 percent, to $77.75 a barrel.
Reference: Reuters, CNBC, DailyFX, FX Steet
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