- Since the beginning of the week, the dollar index has recovered slightly from levels of 102.70 to 103.17 yesterday.
Analysis of the dollar index chart
Since the beginning of the week, the dollar index has recovered slightly from levels of 102.70 to 103.17 yesterday. After that, the index stopped at that level and began to decline to 102.92. During the Asian trading session, the dollar managed to stay above this level and reached 103.00. There, we encountered new resistance and consolidated downwards reaching 102.82 levels.
With this step, the index value dropped to a new daily low, which is considered negative and distracts us from the previous recovery. The EMA50 at 102.90 is creating additional pressure. We now expect to see further decline and test the weekly opening price of 102.74.
Do we stay below 103.00 or will we see the dollar index recover above this level?
Failure to hold above that will push the dollar lower and extend the pullback range. Possible lower targets are 102.70 and 102.60 levels. We need to get back to the area around 103.00 for a bullish option. A new test should give the index hope that it has a chance to move above it and continue the uptrend. Possible higher targets are 103.10 and 103.20 levels. We will have additional resistance at the EMA200 moving average in the area around 103.20 levels.
This morning, we received news on UK GDP. The data was consistent with expectations. In the afternoon, in the American session, the important news will be crude oil inventories. The movement of oil inventories can give us insight into the direction of the US economy. Tomorrow, we have a batch of news from the US market: Core Retail Sales, Initial Jobless Claims, Producer Price Index, and Retail Sales. We expect this news to give a good shake to the dollar index.
