Dollar index under pressure in the week of central banks
- After the FED decided to leave the interest rate at the same level, the dollar index began to retreat from the 104.00 level.
Dollar index chart analysis
After the FED decided to leave the interest rate at the same level, the dollar index began to retreat from the 104.00 level. Yesterday, we saw the formation of a new December low at the 101.70 level. During the Asian trading session, the dollar managed to stop the fall and start a recovery up to the 102.20 level. We encounter resistance there and pull back from the 102.00 level, looking for that new support.
To continue on the bullish side, we need a break above the 102.20 level and an attempt to maintain above it. If we succeed, we can think about a positive consolidation and continuation to the bullish side. Potential higher targets are 102.40 and 102.60 levels.
Do we expect a continuation of the decline of the dollar next week?
We need a new test of the previous low at the 101.70 level for a bearish option. A break below is a sign that the dollar index does not have the strength to initiate a recovery and that a move to the bearish side is a realistic option. Potential lower targets are 101.60 and 101.40 levels.
We will have a smaller volume of economic news next week. Monday is without more important news, and on Tuesday, we should pay attention to the Eurozone CPI and, later, US Building Permits. For Wednesday, the main news is the UK CPI, followed by the US CB Consumer Confidence and Existing Home Sales.
We have Thursday’s US GDP, Initial Jobless Claims, and the Philadelphia Fed Manufacturing Index. Finally, on Friday, we highlight the British GDP annually and for the third quarter, and later, US Core Durable Goods Orders, Core PCE Price Index and New Home Sales.
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