The dollar index slips below 103.00 at the end of the week
In the first part of this week, the dollar index somehow resisted staying above the 103.30 level.
Dollar index chart analysis
In the first part of this week, the dollar index somehow resisted staying above the 103.30 level. On Wednesday, we saw a break below that support level and a drop to 103.00. The volatility came a few hours before the Fed released news on the future interest rate. After the announcement of the news itself, the dollar recovered to 103.80, but it was all short-term.
The Fed left interest rates at the same level, and a later statement by FOMC officials at the meeting hinted at a potential interest rate cut in the second part of this year. That statement disrupted the dollar’s plans, and we started to pull back, so we found ourselves back at the 103.00 level of support.
During the previous Asian session, we encountered resistance at the 103.10 level, which led to a drop to the 102.90 level in the EU session. Potential lower targets are 102.80 and 102.70 levels.
Does the dollar have the strength to recover, or are we sliding even lower?
If the dollar manages to gain new support at the current level, it could trigger a bullish consolidation and recovery. It needs to return to the 103.20 level and close to the EMA200 moving average. Moving above would significantly improve the position and picture for further growth to the bullish side. Potential higher targets are 103.60 and 103.80 levels.
At the beginning of the US session today, very important news for the dollar index awaits us. Nonfarm Payrolls, Unemployment Rate and Average Hourly Earnings. All three news are important indicators of the future course of the dollar index.
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