- The dollar index fell in some consolidation after rising to levels of 106.13 last week.
Graphical analysis of the dollar index
The dollar index fell into some consolidation after rising to levels of 106.13 last week. This week’s movement is in the range of 105.42-106.00. We have seen bearish consolidation within this range for the past two days. The pressure has increased because we are now below the EMA200 moving average and the weekly opening price. Moreover, a lower high was formed this morning at 105.80 compared to the previous day, and this could be a confirmation for us to continue on the bearish side.
Possible lower targets are the 105.50 and 105.40 levels. At the 105.40 area, we will test the previous low of this week, but the chances of seeing a break below it towards a new low are increasing. Last week's low was at the 105.37 level.
The dollar index is under pressure at EMA200, do we expect a continuation of the bearish side?
For a bullish option, the dollar index would first have to break above the EMA200 and 105.80 levels. We would be close to testing the weekly opening price. The previous momentum pushes us to the positive side and eases our position for further recovery. The higher potential targets are the 105.90 and 106.00 levels.
Today’s US session is packed with economic news. First, we have the ADP Nonfarm Employment Change, then Initial Jobless Claims, S&P Global Services PMI, ISM Nonmanufacturing PMI, ISM Nonmanufacturing Prices, Crude Oil Inventories, and lastly, the minutes from tonight’s FOMC meeting. A bunch of equally important news for the dollar index ahead of tomorrow’s US holiday – Independence Day.
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