- Last week we saw the dollar index decline to its lowest level in five months.
Dollar Index Chart Analysis
Last week we saw the dollar index decline to its lowest level in five months. We had immediate resistance at the beginning of the week around the 102.60 level and then the dollar started to weaken again and fell to the 101.43 level. We found support there on Friday and recovered to the 101.70 level. We are still under pressure to continue on the bearish side.
We would have to review the previous minimum. So, we need a drop below and the formation of a new low. In this way we would receive confirmation of the continuation of the downtrend. The lowest possible targets are the 101.20 and 101.00 levels.
What could drive the dollar's recovery?
To start, we need to go up to the 102.00 level. So, we would have to form a fund at that level and consolidate there for a certain time. After that, we could expect, and with positive consolidation, that we will begin a recovery on the bullish side. The highest potential targets are the 102.20 and 102.40 levels. The moving average EMA50 awaits us in the area around 102.40.
In the last week of this year we do not have much important news and we can expect less volatility in the market. Mondays and Tuesdays are Christmas holidays and Wednesday is nothing new. On Thursday we will have initial US jobless claims, pending home sales and crude oil inventories.
ADDITIONAL VIDEO: Weekly summary of market news
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