Dollar index under pressure before the news about the US CPI
The dollar index is under pressure this week, and the reason for that is the inflation news that awaits us later in the US session.
Dollar index chart analysis
The dollar index is under pressure this week, and the reason for that is the inflation news that awaits us later in the US session. The index fell below 104.00 yesterday to a new weekly low of 103.88. We are getting support down there and recovering at the 104.20 level. Here, we come across the EMA50, which does not allow us to move above it; instead, we stay below it.
During this morning’s Asian session, there is a new increase in bearish pressure and we descend to the 104.00 level. The current bearish consolidation tells us that we will likely see a further pullback and the dollar index at a lower level. Potential lower targets are 103.95 and 103.90 levels.
Do we continue down to a new low or start a dollar recovery?
We need a return above 104.20 and the EMA50 moving average for a bullish option. After the formation of a new bottom in that zone, we have the opportunity to start a positive consolidation and start a recovery. On the first step above, at 104.25, we encounter the EMA200 moving average. Its behaviour against the dollar index could show a longer-term trend. If it lets us above, potential higher targets are 104.30 and 104.35.
Data on US inflation will be published in a few hours in the US session. Forecasts say that the data could be weaker than expected, which should have a negative impact on the dollar index. After that, the Bank of Canada will announce the future interest rate, which is expected to remain at the same level as before at 5.00%. Towards the end of the US session, we have the FOMC meeting and their view of future monetary policy and the US economy.
The post Dollar index under pressure before the news about the US CPI appeared first on FinanceBrokerage.
