The dollar index could continue to recover this week
During this morning’s Asian trading session, the dollar index rose to 101.79
Dollar index chart analysis
During this morning’s Asian trading session, the dollar index rose to 101.79. We stopped there, and the index started a slight retreat with support at the 101.60 level. We have received the required support and now see a small break to 101.65. Today is a holiday in the United States—Labor Day. The market will be closed, and volatility will be at a minimum.
Based on this, we can expect a sideways movement of the dollar index without major movements. The movement range is 101.60-101.80. For a bearish scenario, we need the formation of a new low below the 101.60 level. This will form a new daily low and confirm that the index is under pressure. Potential lower targets are the 101.50 and 101.40 levels. At 101.40, we hope for support from the EMA 200 moving average.
The index is solid on Monday, and we expect a continuation to the bullish side
The dollar index’s inability to maintain above that line will strengthen the bearish momentum. For a bullish option, we need a break above the 101.80 level. With this, we climb to a new daily high and strengthen the bullish momentum. That would return us to the previous bullish trend and increase optimism for a continuation on the bullish side. Potential higher targets are the 101.90 and 102.00 levels.
As we said, today is Labor Day, a holiday in the United States. The market will be closed in the afternoon. Only tomorrow can we expect an increase in market volatility. We have some important news for the dollar index on Tuesday: S&P Global US Manufacturing PMI, ISM Manufacturing PMI, and ISM Manufacturing Prices. We will single out only news about Swiss inflation and GDP from today’s EU session. That news could be interesting because, based on the published data, we can sense an irregular move by the Swiss central bank.
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