The dollar index was positive for the second day in a row
On Wednesday evening, the dollar index fell to 103.65, forming a new July low.
Dollar index chart analysis
On Wednesday evening, the dollar index fell to 103.65, forming a new July low. A recovery was initiated after the consolidation on Thursday morning, and a return above the 104.00 level followed. During this morning’s Asian trading session, the dollar continued to rise and is now at 104.35. We are close to testing the EMA 200 moving average, which is at 104.40.
For now, let’s not predict how the index will behave in contact with the EMA 200. If we see an impulse above, it will give the dollar a tailwind to continue its growth on the bullish side. Potential higher targets are 104.50 and 104.60 levels. By crossing above 104.50, we are going to a new weekly high.
The dollar is swinging to the bullish side, is there any strength to go above the EMA 200?
For a bearish option, we need the initiation of a bearish consolidation and a pullback of the dollar below the 104.20 level. It is a sign that we do not have the strength to move above the EMA 200 and that a bigger pullback will follow. By falling below 104.00, the index falls below the weekly open price to the negative side. Such a picture strengthens the bearish momentum and will influence the dollar to continue falling. Potential lower targets are 103.90 and 103.80 levels.
While today’s economic news may not significantly impact the dollar index, it’s important to keep an eye on the upcoming week dominated by news from the US market. Despite their relatively low volume, these news items will certainly influence the index. Of particular note is the Bank of Canada’s decision on its interest rate for next week.
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