The dollar index is losing ground below support at 104.00

During this morning’s Asian session, the dollar index broke below the 104.00 support level and fell to a new July low of 103.66.

Dollar index chart analysis

During this morning’s Asian session, the dollar index broke below the 104.00 support level and fell to a new July low of 103.66. For now, we are holding above that level and see the index moving up to 103.80. We need a stronger bullish impulse to move away from this morning’s low.

This should initiate bullish consolidation and the recovery of the dollar index. A return above the 104.00 level would move the index to a safer position. At 104.20, we will test the EMA 50 moving average. Moving above it further establishes the position, and we can hope for further growth on the bullish side. Potential higher targets are the 104.40 and 104.60 levels.

The dollar is under pressure to fall to a new weekly low and extend the bearish trend.

For a bearish option, we need a negative consolidation and a drop to the 103.66 support level. With the new impulse below, we will create a new July low and thus strengthen the bearish momentum for the continuation of the bearish side. Potential lower targets are 103.40 and 103.20 levels. The previous time, the dollar index was at 103.00 in March 2024.

This week is dominated by news from the EU session. Data on British inflation and Eurozone inflation were published this morning. This data was positive for European currencies, but it had a negative impact on the dollar index. In the US session, data on Crude Oil Inventories will be released. Tomorrow, the European Central Bank ECB will announce the future interest rate. Forecasts are that there will be no changes and that the interest rate will remain at the same level. Data on US Initial Jobless Claims and the Philadelphia Fed Manufacturing Index will be released later.

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