- After the unstable Asian trading session, the dollar index fell to 103.47, while we witnessed growth in the European Union session.
- On Wednesday, the Fed will decide whether to leave interest rates at the same level or make changes.
Analysis of the dollar index chart
After the unstable Asian trading session, the dollar index fell to 103.47, while we witnessed growth in the European Union session. After receiving support, the dollar begins to consolidate upward and rises to 103.63 levels. We could test the previous high from Friday at 103.70 for the rest of the day. If we succeed, we will have the opportunity to attack the January high at 103.82. Possible higher targets are 103.90 and 104.00 levels.
We need to pull back to the 103.25 support level and the EMA200 moving average for a bearish option. Pressure in that area will have the opportunity to move us lower and thus form this week's bottom. Possible lower targets are 103.00 and 102.80 levels. The lowest level of the dollar last week in the region was around 102.80 levels.
The Fed and future interest rates determine the direction of the dollar
On Wednesday, the Fed will decide whether to leave interest rates at the same level or make changes. Economists expect that we will see interest rates at the same $5.50 level even after the report. This means that the Fed is not satisfied with how inflation is moving and is postponing interest rate cuts.
On Thursday, the Bank of England will decide the interest rate. There are expectations below that interest rates are expected to remain at the same level. German GDP and CPI on Tuesday and Wednesday may determine the direction of the euro in the coming period. For Friday, we leave the Non-Farm Payrolls and Unemployment Rate reports for the end of the week.
