The dollar index under pressure at 104.40 level on Monday

Last week’s recovery of the dollar index stopped on Friday at the 104.80 level, followed by a retreat. 

Dollar index chart analysis

Last week’s recovery of the dollar index stopped on Friday at the 104.80 level, followed by a retreat. We got support at the 104.40 level and stayed above that level until the market closed. During this morning’s Asian trading session, the index movement took place in the 104.40-104.50 narrow range. We are getting closer to the US session and hoping for a more concrete move by the dollar to show us a potential trend.

Crossing above the 104.50 level, we are moving above the weekly open price and the EMA50 moving average. That would be a good start and momentum for our bullish option. After that we believe we would see a bullish consolidation above the 104.60 level. Potential higher targets are 104.70 and 104.80 Friday’s resistance. Another move above 104.90, and we will test the EMA200 moving average.

Does the dollar remain under pressure at 104.50 or will a new impulse follow soon?

We need a break below the 104.40 level for a bearish option. By going down, we form a two-day low and strengthen the bearish momentum. The dollar is forced to retreat further and look for new support. Potential lower targets are 104.30 and 104.20 levels.

No significant economic news today, tomorrow too. Wednesday is set to be an interesting first in the Asian session as the release of RBNZ data on the future interest rate is expected. Economists predicted that the interest rate will remain at the same level. After that, in the EU session, we have British inflation. Here, inflation is expected to drop to 2.1% from 3.2%. In the US session, we have Existing Home Sales first, then FOMC Meeting Minutes. It will be very interesting to see what will be announced from the Fed meeting and the future monetary policy.

 

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