The dollar index retreated to 104.50 levels this morningAt the start of the Asian trading session, we saw a bearish gap in the dollar index.
Dollar index chart analysis
At the start of the Asian trading session, we saw a bearish gap in the dollar index. This was followed by a bearish consolidation and a pullback to the 104.50 level. At that level, we received support, after which we saw a recovery to 104.75 levels. We could expect to see continued recovery and closing of this morning’s gap. Thus, we would return to the zone around the 105.00 level.
For a bullish option, we need a break above and hold there. After that, we can expect to see a continuation of positive consolidation and the formation of a new high. Potential higher targets are 105.20 and 105.40 levels.
We need a negative consolidation and a new price pullback below the 104.50 level for a bearish option. Below, we will see a drop to a new low and a continuation of the bearish option. Potential lower targets are 104.40 and 104.20 levels.
We don’t have much economic news this week, but we do have a couple of very important ones for the movement of the dollar index. We await the US CPI and US Core CPI report on Wednesday. The inflation report will show what the Fed’s future steps will be regarding the level of the interest rate. Additional news that could affect the dollar index is the British GDP and the ECB interest rate decision on Thursday.
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