The dollar index is trying to maintain above 104.20 level

• During this morning’s Asian trading session, the dollar index rose to 104.55.

Dollar index chart analysis

During this morning’s Asian trading session, the dollar index rose to 104.55. We stayed there for a short time because a pullback to 104.30 was initiated. At this level, it is possible that we will receive support and thus initiate a return to the bullish side. The current pressure is the EMA 200 moving average. This could influence us to see a pullback of the index to 104.20, this week’s support.

If the pressure on the dollar index continues in that zone, a drop below is inevitable. This shows us that the next move is to a new lower low, which extends the bearish option. Potential lower targets are 104.10 and 104.00 levels. Last week’s lowest dollar index value was at the 103.65 level.

Expectations are that the dollar will visit the 104.00 level before starting a new recovery.

For a bullish option, we need a positive consolidation and a return above the 104.40 level, which brings us back above the EMA 200 moving average. Then, we need to stabilize there above and wait for the next impulse to start a bullish scenario. Higher potential targets are the 104.60 and 104.70 levels.

At the beginning of today’s US session, data on Building Permits was published. The data showed better figures than the forecast. We’ll have new economic news later: S&P Global US Manufacturing PMI, S&P Global Services PMI, New Home Sales, and Crude Oil Inventories. Also, the Bank of Canada will announce the future interest rate. Economists predict the bank could reduce the interest rate from 4.75% to 4.50%. Tomorrow’s key data for the dollar index will be released: US GDP. Expectations are that there could be a drop in GDP in the second quarter.

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