The dollar index remains at 105.00 at the start of the week
Last Friday was very bearish for the dollar index as we saw a drop from 106.20 to 105.00.
Dollar index chart analysis
Last Friday was very bearish for the dollar index as we saw a drop from 106.20 to 105.00. During the Asian trading session, the index managed to hold above 105.00 but remained under bearish pressure.
We failed to initiate a bullish consolidation, and we see a breakthrough below the support level and the formation of a new low at the 104.85 level. If the pressure on the dollar continues, the bearish option will make us start a further retreat. Potential lower targets are 104.60 and 104.40 levels.
Positive consolidation for recovery above 105.20
To be bullish, we need a new positive consolidation and a breakthrough of the dollar index above the 105.20 level. Thus, we would cross above the previous consolidation zone, and there, we could form a new bottom before continuing the recovery.
Potential higher targets are 105.40 and 105.60 levels. EMA50 moving average is in the zone around 106.00 levels.
This week, we won’t have a bunch of important news like last week. On Tuesday, we have the RBA’s decision on future interest rates. Forecasts are that we will see an increase in the interest rate from 4.10% to 4.35%.
On Wednesday, we have the German CPI and Powell’s speech on future monetary policy in the US. On Thursday, news from the US market on Initial Jobless Claims for the previous week, and we will again have Powell’s speech. Friday is dedicated to the pound and British GDP for September and the third quarter.
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