- Last week we saw the recovery of the dollar index from the level of 104.80 to 106.00.
Dollar Index Chart Analysis
Last week we saw the recovery of the dollar index from the level of 104.80 to 106.00. We found resistance at the 106.00 level and on Friday we closed at 105.80. During the Asian session we moved in the area around that level, testing it and the EMA50 moving average. We now see bearish momentum and a break below this support.
Today’s current hunt was formed at the level 105.69. The current outlook tells us that we could see a further pullback as the dollar is under some pressure earlier this week. This could affect a further drop; the lowest possible targets are 105.60 and 105.40.
We remain under pressure below the 106.00 level.
We need positive consolidation and a return above the 105.80 level for a bullish call. In this way, we would return above the EMA50 moving average, which would immediately improve the image of the dollar on the chart. With the support of the EMA50, we would start a further recovery and attack the resistance at the 106.00 level again.
A break above would be real, reinforcing a bullish option for the dollar to continue its recovery. The highest potential targets are the 106.20 and 106.40 levels.
There will be a lot of important economic news in all trading sessions this week. The most important are the British CPI, the Eurozone CPI and the US CPI. Additionally, we should pay attention to Japan’s GDP for the third quarter, China’s industrial production, the Philadelphia Federal Reserve’s manufacturing index, and Australia’s unemployment rate.
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