- Since the beginning of the week, the dollar index has witnessed a continuous decline.
Analysis of the dollar index chart
Since the beginning of the week, the dollar index has witnessed a continuous decline. On the upside, we face resistance at 104.00 and the EMA200. Yesterday we saw the dollar decline to 103.58, forming a new weekly high there. This was followed by an attempt to recover to the 103.90 level. This is where the upward attempt stops, and we begin a new decline.
Now we have an opportunity to test yesterday's low, as the dollar fell to 103.60. There is a big struggle to get new support because if the support does not hold, the dollar slides to a new low, adding to the existing downward pressure. Possible lower targets are 103.50 and 103.40 levels.
Did they have the strength to start recovering?
If the dollar can stay above the 103.60 level, it will have a new opportunity to return to the area around the 104.00 level. Returning to that area gives the dollar the opportunity to return to the upward trend and move as much as possible from the lowest level it recorded this week. By breaking above the 200 SMA, we break out of the downtrend and can hope for an upward correction. Possible higher targets are 104.10 and 104.20 levels.
In the afternoon, we have a speech by Federal Reserve Chairman Jerome Powell. His speech may be key to the Fed's future monetary policy. Powell will base his decisions on the level of interest rates on the strength of inflation and his assessment of the coming period. Tomorrow, the European Central Bank will present its decision on the interest rate, and expectations are that it will keep it at the same level.
