The dollar index is falling below the EMA200 and 105.60
- Last week, we watched the dollar index move above the 106.00 level.
Dollar index chart analysis
Last week, we watched the dollar index move above the 106.00 level. On two occasions, the index tried to break above 106.20, but we were not successful in doing so. We had a previous attempt on Friday, after which a bearish consolidation was initiated that continued today.
This morning at the start of the Asian session, a bearish gap occurred from 105.85 to 105.65 level. After that, the bearish retreat continued to the 105.40 level. We have additional pressure because we are now below the EMA200 moving average. It will only strengthen the bearish momentum and lower the dollar index to a new weekly low. Potential lower targets are 105.20 and 105.00 levels.
Is the dollar index going to a new low, or is it returning above the EMA200?
If the index manages to stabilize and return above 105.60 and the EMA200 moving average, we could see a promising new bullish trend. With the support of EMA200, it will be much easier for us to start a positive consolidation. After that, we expect to close this morning’s gap and climb above the weekly open price. Potential higher targets are 106.00 and 106.20 levels.
This week is full of important economic news. At the opening of the US session, data on German inflation will be published, followed by S&P Global US Manufacturing PMI, ISM Manufacturing PMI and ISM Manufacturing Prices. During the EU session tomorrow, data on the Eurozone CPI will be published later: Fed Chair Powell Speaks and JOLTs Job Openings. The US market will close early on Wednesday due to the United States – Independence Day holiday.
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