The dollar index starts this year positively above 102.50

• Since the beginning of the year, the dollar index has continued an upward trend with the formation of a maximum at the level of 102.80.

Dollar Index Chart Analysis

Since the beginning of the year, the dollar index has continued an upward trend with the formation of a maximum at the level of 102.80. On Wednesday we stopped the previous bullish momentum at 102.70, after which the dollar returned to 102.20. We then got support that broke above the 102.50 level during the Asian session. That's how we got to the top today.

Now, we need to stay above 102.60 if we want to start a further recovery on the bullish side. The highest potential targets are the 103.00 and 103.20 levels. We would need to return to the support at 102.20 for a bearish option.

If it breaks below, it would form a two-day low and confirm the bearish momentum. The lowest possible targets are the 102.00 and 101.80 levels. The EMA50 is in an area close to the 102.00 levels and it will be interesting to see how the dollar will perform in that area.

Economic news and impact on the dollar index

This week's mixed data strengthened the dollar and failed to push it lower. This morning the eurozone CPI data was published, which is negative for the euro. Inflation fell to 2.9% compared to the expected 3.0%, but was higher than the previous report, which was 2.4%.

In the afternoon, in the first hour of the US session, we have news on December non-farm payrolls, the unemployment rate and average hourly earnings, and a couple of hours later, the ISM non-manufacturing PMI and prices of the ISM non-manufacturing sector. Most attention is focused on the dollar; We can expect greater market volatility during that period.