- During the Asian session this morning, the dollar index rose to 104.55.
Graphical analysis of the dollar index
During the Asian session this morning, the dollar index rose to 104.55. We held there for a short while as a pullback to 104.30 was initiated. At this level, we might get support and thus start a comeback to the bullish side. The current pressure is the EMA 200 moving average. This might influence us to see a pullback of the index to 104.20, the support for this week.
If the pressure on the dollar index continues in that zone, a drop below that zone is inevitable. This shows us that the next move is towards a new lower low, which extends the bearish option. Possible lower targets are the levels of 104.10 and 104.00. The lowest value of the dollar index last week was the level of 103.65.
The dollar is expected to visit the 104.00 level before starting a fresh recovery.
For a bullish option, we need a positive consolidation and a return above the 104.40 level, which takes us back above the 200 EMA. Then, we need to stabilize there and wait for the next push to start a bullish scenario. The higher potential targets are the 104.60 and 104.70 levels.
At the beginning of today's US session, building permits data was released, which showed better than expected figures. We will have new economic news later: S&P Global US manufacturing PMI, S&P Global services PMI, new home sales and crude oil inventories. In addition, the Bank of Canada will announce the future interest rate. Economists predict that the bank may reduce the interest rate from 4.75% to 4.50%. Tomorrow, key data on the dollar index will be released: US GDP. GDP is expected to decline in the second quarter.
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