- The first part of this week was very bearish for the dollar index.
Dollar index chart analysis
The first part of this week was very bearish for the dollar index. Yesterday, we saw a strong bullish impulse and a dollar jump to 105.43. Yesterday, the ECB raised its interest rate to 4.50%, which was interpreted as the euro’s weakness on the impact of current inflation. Additional stimulus for the index was positive economic news from the US market.
During the Asian trading session, we encountered resistance, and the dollar began to retreat to the 105.20 level. We are currently finding support at that level and are maintaining ourselves in that zone. This could produce another bullish consolidation and a return to yesterday’s resistance zone. We could expect to see both a breakout above and a continuation into the formation of a new high. Potential higher targets are 105.50 and 105.60 levels.
We need a break below the 105.20 support level for a bearish option. After that, we would go down to the 105.00 support level. The passage below could begin a deeper pullback. Potential lower targets are 104.80 and 104.60 levels. Additional support is in the EMA50 moving average around 104.80 levels.
Next week, we have the Fed’s future interest rate report. Depending on that report, the movement of the dollar index will also depend. Other news are EU CPI, GBP CPI, NZD GDP and CHF interest rate decision.
BONUS VIDEO: Weekly news summary from the markets
(embed)https://www.youtube.com/watch?v=ilWhYn7tdxY(/embed)
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