The dollar index is recovering after Thursday’s drop to 104
A strong bearish consolidation pushed the dollar index to the 104.00 level.
Dollar index chart analysis
A strong bearish consolidation pushed the dollar index to the 104.00 level. A new low was formed on Thursday morning, after which a positive consolidation and recovery above the 104.60 level was initiated. During this morning’s Asian trading session, the index stayed in that zone and started further growth, forming a two-day high at 104.75.
We have received support at the EMA50 moving average and hope that it will follow us to the 105.00 level, where we encounter the EMA200 moving average. There, we expect to have greater resistance to the continuation on the bullish side. Potential higher targets are 105.20 and 105.40 levels. We are testing the weekly open price at 105.30.
The dollar’s recovery has started; does it have the strength to continue?
We need a negative consolidation and pullback below the 104.60 level for a bearish option. We are testing the daily open price at 104.50. Going below that support, we move to the bearish side and expect to see a pullback to lower levels. Potential lower targets are 104.40 and 104.20 levels.
Next week, we have a solid amount of economic news. On Tuesday, we highlight Fed Chair Yellen Speaks. On Wednesday, in the Asian session, the Reserve Bank of New Zealand will announce data on the future interest rate. Forecasts say that the RBNZ will leave the interest rate at the same level.
Then we have UK CPI, US Existing Home Sales and FOMC Meeting Minutes. Thursday standard: Initial Jobless Claims, followed by S&P Global US Manufacturing PMI, S&P Global Services PMI and New Home Sales.
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