Dollar index falls under pressure below 105.00 level

• The dollar index fell to its lowest level this week, at 104.35.

Graphical analysis of the dollar index

The dollar index fell to its lowest level this week, at the level of 104.35. On Monday, only the index remained well above the EMA200 moving average. On Tuesday, after forming a high at 106.05, the value of the dollar index began to retreat. On Wednesday, we saw strong bearish impulses and a drop to 105.05. We found the first support at that level and recovered to 105.40.

On Thursday, the index failed to hold in that zone and continued to retreat to the level of 105.10. During the Asian session this morning, the trend remained unchanged and the dollar continued to fall to 104.35. We are currently holding on to a three-week low and there is a significant possibility of a further pullback and the formation of a new low. Possible lower targets are the levels of 104.90 and 104.80.

Will the dollar fall to a new July low or gain support?

There is a possibility of a bullish option, which would require positive consolidation and stabilization above the level of 105.00. If this is achieved, the dollar index could create bullish momentum and start a recovery. This could lead to possible higher targets at the levels of 105.10 and 105.20. Additional resistance is the EMA50 and the zone of 105.25, while the EMA200 is located at the level of 105.50.

At the beginning of the US session, data on average hourly wages, non-farm payrolls and the unemployment rate will be released. These data are key indicators of the health of the US economy and can significantly influence the dollar index and its movement. Positive data could strengthen the dollar's position, while negative data could lead to a further decline. Towards the end of the US session, we will have the Federal Reserve's Monetary Policy Report, which will provide information on the future direction of US monetary policy and its possible impact on the dollar index.