Dollar index manages to hold above 105.00 for now

• The dollar index is recovering from last week's downtrend.

Graphical analysis of the dollar index

The dollar index is recovering from last week's downtrend. On Monday, after forming a new low at 104.80, we saw the beginning of a bullish consolidation. The index stabilized above the 105.00 level yesterday and received support from the EMA 50 moving average. Thus, yesterday, we saw a rise to 105.20, where we formed the high of this week. Today's picture is slightly bearish and the dollar is retreating to the 105.00 level.

With continued pressure on the index, we will see a pullback below the 50 EMA. With that, we are moving back to the bearish side. Possible lower targets are the 104.90 and 104.80 levels. At the 104.87 area, the index will test the weekly opening price to try to stay above it on the positive side.

The dollar has started a recovery but needs momentum above the EMA 200 moving average

We need positive consolidation and growth of the dollar index above the 105.20 level for a bullish option. Then it needs to stabilize there before continuing with further recovery. By breaking above the 105.30 level, we break above the EMA 200 moving average and get its support for continuing on the bullish side. Possible higher targets are the 105.40 and 105.50 levels.

Today, at the US session, Federal Reserve Chairman Jerome Powell will speak, followed by the release of data on crude oil inventories and the 10-year bond auction. During Powell's speech, we can expect an increase in volatility on the dollar index chart. We also expect to hear his views on the US economy and the way monetary policy will be conducted.