The dollar index begins to recover from morning’s support
- On Tuesday, the dollar index retreated to a new weekly low at 100.51
Dollar index chart analysis
On Tuesday, the dollar index retreated to a new weekly low at 100.51. During this morning’s Asian trading session, the index initiated a bullish consolidation that is still active. The dollar recovered to 101.00 and received support from the EMA 50 moving average. We are now at 100.95 and expect to stay in this small bullish channel and climb to a new daily high.
If we manage to stabilize above 101.00, it would be a small success that would strengthen the dollar index’s bullish position. This is a crucial moment for the index. After that, further bullish consolidation and the conquest of higher levels remain. Potential higher targets are 101.20 and 101.40 levels. A big test for the index is at 101.40 in the EMA 200 moving average.
We have been in a bullish trend since this morning, do we have the strength to continue?
For a bearish option, the dollar index would have to turn to the bearish side and pull below 100.80. This would drop below the EMA 50 moving average and lose its support, increasing the pressure on the index to start a further retreat. In that case, bearish consolidation would bring us below the 100.60 weekly open price. Potential lower targets are the 100.40 and 100.20 levels.
From today’s news, we highlight Crude Oil Inventories. The data will show in which direction crude oil stocks are moving. Tomorrow is an important day for the index because the data on US GDP and Initial Jobless Claims will be published. GDP is expected to increase from 1.4% to 2.8%. If the data is higher than forecast, it will positively affect the dollar index.
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