- Earlier this week we saw the formation of a new dollar index high at the 107.34 level.
Dollar Index Chart Analysis
Today’s chart review will be done over a four-hour period to give us a broader overview of the dollar index movements in the previous period and based on that we will analyze the potential future trend.
Earlier this week we saw the formation of a new dollar index high at the 107.34 level. The dollar stopped its growth at that level and began a retreat below the 107.00 level. For the rest of the week, the dollar continued to fall and on Friday fell to 106.00 leva. For now we have stopped at that level and are waiting for the beginning of the new week to continue.
What happened to the negative dollar index?
The negative for the dollar index is that it fell below the EMA50 moving average and lost its support. This could be negatively reflected in increasing pressure on the dollar. We would then see a break below the 106.00 level and a pullback towards lower support levels. The lowest possible targets are the 105.50 and 105.00 levels. With that movement, we would form a new October low and confirm the bearish scenario.
With a new bullish consolidation, we need to return above the 106.50 level to have a bullish option. Therefore, we could break above the EMA50 moving average again and look for its support. The next target is the 107.00 level and a break above it could further strengthen the dollar’s position to continue on the bullish side. The highest potential targets are the 107.50 and 108.00 levels.
This week will also be dominated by economic news from the US market: producer price index, US core CPI, US CPI, initial jobless claims and FOMC meeting minutes. The German CPI and the United Kingdom’s Gross Domestic Product (GDP) are other important news.
ADDITIONAL VIDEO: Weekly summary of market news
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