The dollar index faces a major challenge this week
Last week’s pressure on the dollar index was halted on Friday after the release of the NFP and unemployment rate news.
Dollar index chart analysis
Last week’s pressure on the dollar index was halted on Friday after the release of the NFP and unemployment rate news. The positive data influenced the dollar to gain support at the 104.00 level, and with a strong bullish impulse, it climbed up to the 104.70 level in an hour. The index continued to grow to 104.93 levels until the market’s closing on Friday.
During this morning’s Asian trading session, we saw a bullish gap above the 105.00 level and continued growth up to the 105.30 level. With that, we climbed to a new almost 30-day high. For now, we stop there and take a step back to the 105.15 level. It could be the first step of a deeper retreat and potentially closing the gap from the market opening. Potential lower targets are 105.00 and 104.90 levels.
Dollar above 105.00 again, had the strength to continue growing?
For a bullish option, we need an impulse of the dollar index above the 105.40 level. The index breaks the previous high and reinforces the bullish momentum to initiate a further recovery to the bullish side. Potential higher targets are 105.50 and 105.60 levels.
This week will be very important for the dollar index because we will have a lot of important news that can affect the further trend. Everything that matters this week is packed away on Wednesday. In the EU session, at the beginning, the British GDP and German CPI data will be published. In the US session, we start with Core CPI and regular CPI. Inflation data is very important for the dollar index. After that, the FED will announce the future interest rate, and it is expected that it will remain at the same level as before. Too many factors that can shake the market will keep investors on the sidelines.
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