The dollar index starts this year positively above 102.50
- Since the beginning of the year, the dollar index has been in a bullish trend with the formation of a high at the 102.80 level.
Dollar index chart analysis
Since the beginning of the year, the dollar index has been in a bullish trend with the formation of a high at the 102.80 level. On Wednesday, we stopped the previous bullish impulse at 102.70, after which the dollar returned to 102.20. Then, we got the support that made a break above the 102.50 level during the Asian trading session. That’s how we climbed to today’s high.
Now, we need to hold above 102.60 if we want to start a further recovery on the bullish side. Potential higher targets are 103.00 and 103.20 levels. We would have to go back to support at 102.20 for a bearish option.
With a break below, they would form a two-day low and thus confirm the bearish momentum. Potential lower targets are 102.00 and 101.80 levels. EMA50 is in a zone around 102.00 levels, and it will be interesting to watch how the dollar will behave in that zone.
Economic news and impact on the dollar index
This week’s mixed data strengthened the dollar and failed to push it to lower levels. This morning, data on the CPI from the eurozone was published, which was negative for the euro. Inflation fell to 2.9% compared to the expected 3.0% but was higher than the previous report, which was 2.4%.
In the afternoon, in the first hour of the US session, we have news on Nonfarm Payrolls for December, Unemployment rate and Average Hourly Earnings, and a couple of hours later, ISM Non-Manufacturing PMI and ISM Non-Manufacturing Prices. The biggest focus is on the dollar; we can expect increased market volatility during that period.
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