The dollar index remains under pressure from Thursday
On Friday, we saw a drop in the dollar index to 105.15.
Dollar index chart analysis
On Friday, we saw a drop in the dollar index to 105.15. A day earlier, on Thursday, we had resistance at 105.70, after which the dollar began to retreat. During this morning’s Asian trading session, the index movement took place around 105.30 levels. With the start of the EU session, the dollar began to weaken again and retreat to the 105.20 level.
That could initiate a further pullback in the US session and threaten Friday’s low. Potential lower targets are 105.10 and 105.00 levels. Last week’s low dollar index was at the 104.90 level. For a bullish option, we need a better and more stable bottom. If we manage to form it at the current level, we will have a good starting position to start the recovery.
Do we stay under pressure or go above the EMA200?
By first breaking above the 105.40 level, we get support at the EMA50 moving average. We are not far from the EMA200 moving average, which is at the 105.45 level. If we succeed in crossing that level, we will be significantly relieved of the bearish pressure. Potential higher targets are 105.50 and 105.60 levels.
There is no very important economic news today. Tomorrow, first in the EU session, German inflation data will be published. Economists forecast that it could come after an increase in inflation. Later in the US session, we have the U.S. Producer Price Index and Fed Chair Powell Speaks. In this period, we can expect increased market volatility because the future steps of the FED will be discussed.
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