The dollar index could soon fall to a new annual low
- This morning, the dollar Index retreated to the 102.00 level
Dollar index chart analysis
This morning, the dollar Index retreated to the 102.00 level. A strong bearish consolidation at the opening of the Asian session immediately attacked the dollar and pushed it to a new low. This decline brought the index down to its value on January 5 this year, which put it within reach of testing the annual open price.
Further decline stopped there, and the dollar index recovered to 102.25. Consolidation has started, and we hope for continuation and recovery at higher levels. By returning to 102.40, the value of the index would return to the daily open price. Then, it is necessary to keep it there. If he succeeds in this, we expect to see further growth in the formation of a new daily high. Potential higher targets are 102.50 and 102.60 levels. The index could receive additional support in the EMA 50 moving average by crossing above the 102.55 level.
The index falls to a new seven-month low and threatens the annual open price
For a bearish option, the dollar index would have to pull back and test this morning’s low at 102.00. A new visit down there will put new pressure on that level, and this time, we could see a break below. Potential lower targets are 101.90 and 101.80 levels.
This week, the volume of important economic news is decreasing. The first strong news awaits us tomorrow in the EU session. Data on Eurozone inflation will be published. Economists predict an increase in inflation from 2.5% to 2.6%. If that happens, the euro could strengthen because the ECB would have to postpone the reduction of the interest rate. On Wednesday, the FOMC will meet, and the next steps of the Fed’s monetary policy will be announced.
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