- At the beginning of this week, the dollar index remained positive, above the EMA50 and the 102.30 level.
Analysis of the dollar index chart
At the beginning of this week, the dollar index remained positive, above the EMA50 and the 102.30 level. During the Asian trading session, we witnessed an attempt to decline and test these levels, and the dollar was able to resist them and form the bottom from which it began to recover. With bullish consolidation, it rose to 102.67.
There we form today's bottom before the start of the American session. If the dollar can hold above 102.50, it will be well positioned for a new pulse and jump to a new high. Possible higher targets are 102.70 and 102.80 levels.
Does a drop below the 50 moving average (4 hours) mean a falling dollar?
A pullback below the EMA50 would put the dollar under pressure to test the 102.10-102.20 support area last week. The new decline increases pressure on the dollar, strengthening the downward momentum, which will allow us to see a breakout down and the formation of a new low in two weeks. Possible lower targets are 102.00 and 101.90 levels.
Today is a holiday in the United States, Martin Luther King Jr. Day. The stock exchange will be closed, and volatility is expected to decrease in all currencies and stocks. Tomorrow, in the EU session, we will highlight German inflation for December. Expectations indicate an increase in the inflation rate compared to the previous month. Wednesday is full of news, first Chinese GDP, then UK CPI and Eurozone CPI, while in the afternoon, we have retail sales in the US session. On Thursday and Friday, news from the US market is dominated by the Philadelphia Fed Manufacturing Index, Initial Jobless Claims and Oil Inventories.
