The dollar index surged this morning to 104.75 level

The dollar index received support at the 104.36 level on Friday. 

Dollar index chart analysis

The dollar index received support at the 104.36 level on Friday. After that, we saw the start of a recovery that continues today. During this morning’s Asian session, the index briefly retreated to 104.50 levels. It then initiated a positive consolidation and recovered to 104.76 levels. In this zone, we are testing the EMA200 moving average and hoping for a break above to continue on the bullish side.

Potential higher targets are 104.80 and 104.90 levels. If the dollar index strongly surges, it could rise above the 105.00 level. The opposite is the resistance at the EMA200 and 104.75 level. Failure to move above will result in us seeing the initiation of a negative consolidation.

Could the dollar continue above 105.00 if it remains in a bullish consolidation?

Such a move of the index would bring us down to testing the weekly open price at the 104.60 level. Increased bearish momentum would easily push the dollar below and thus continue the bearish consolidation. Potential lower targets are 104.50 and 104.40 levels.

This week is full of important economic news. Today, in the US session, we highlight the S&P Global US Manufacturing PMI, ISM Manufacturing PMI and ISM Manufacturing Prices. On Tuesday, we have JOLTs Job Openings. We have the following for Wednesday: ADP Nonfarm Employment Change, Crude Oil Inventories, and S&P Global Services PMI. Also, important news is the Bank of Canada and the publication of data on the future interest rate. The forecast is that the interest rate is expected to decrease from 5.00% to 4.75%.

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