USD steady as markets await US-China trade talks outcome

The US dollar index is holding steady near 104.20, showing minimal movement after yesterday's 0.2% decline that eroded Friday's post-NFP gains. Currency markets are in wait-and-see mode as high-level US-China trade discussions continue in London, with initial reports suggesting productive dialogue. The greenback remains range-bound against major pairs, with EUR/USD consolidating around 1.0820 and GBP/USD near 1.2650. Today's European economic calendar is notably light, shifting focus entirely to the trade negotiations. Market participants are particularly sensitive to any breakthrough in tariff discussions or technology transfer agreements, which could significantly impact risk sentiment and dollar positioning. Technical indicators suggest the dollar index faces resistance at 104.50 while support sits at 103.80. A positive trade outcome could weaken the dollar as risk-on sentiment returns, while breakdown in talks might trigger safe-haven flows back into the greenback.