The dollar index could continue to pull back this week
- After the dollar index’s support at the 100.60 level, we managed to see a recovery only up to the 100.90 level
Dollar index chart analysis
After the dollar index’s support at the 100.60 level, we managed to see a recovery only up to the 100.90 level. There, the index encountered new resistance and started a new bearish consolidation up to 100.15, forming a new yearly low. Soon after, we saw new support at that level and a recovery to the 100.40 level. The market closed in that zone, leaving the dollar index under pressure at the opening of this week’s session.
For another attempt to stay on the bullish side, we need to get back above 100.80 and the EMA 200 moving average. Then, the dollar needs to hold there before the bullish consolidation continues. A break above the 101.00 level instills hope that the dollar index has enough upside to trigger a larger recovery and visit higher levels. Potential higher targets are 101.20 and 101.40 levels.
The index continues to move under the pressure of the EMA 200 moving average
The index’s inability to return above the EMA 200 will negatively affect the dollar’s further movement. New negative consolidation and new pressure on Friday’s low of 100.15 are expected. By forming a new low, we could see the dollar in the 100.00 zone. Potential lower targets are the 99.80 and 99.60 levels.
We have a lot of strong and hearty economic news on Monday. First, in the Asian session, data on China’s Manufacturing PMI will be released. According to the forecasts, better data than the August ones are expected. At the start of the EU session, we have the British GDP and later the German CPI. In the afternoon, data on the Chicago PMI will be published in the US session, and at the end of the day, Jerome Powell, chairman of the FED, will give his speech. Powell’s speech could have a decisive impact on the future movement of the dollar index.
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