The dollar index remains under pressure this week as well
- Last week, we saw the dollar index pull back to a five-month low.
Dollar index chart analysis
Last week, we saw the dollar index pull back to a five-month low. We had immediate resistance at the beginning of the week around the 102.60 level, and later, the dollar began to weaken again and fell to the 101.43 level. We get support there on Friday and recover to the 101.70 level. We are still under pressure to continue on the bearish side.
We would have to revisit the previous low. Then, we need a drop below and the formation of a new low. Thus, we would receive confirmation of the continuation of the bearish trend. Potential lower targets are 101.20 and 101.00 levels.
What could push the dollar to recover?
To begin with, we need to move up to the 102.00 level. Then, we would have to form a bottom at that level and consolidate there for a certain time. After that, we could expect, and with a positive consolidation, we start a recovery on the bullish side. Potential higher targets are 102.20 and 102.40 levels. EMA50 moving average awaits us in the zone around 102.40.
In the last week of this year, we do not have much important news, and we can expect reduced volatility in the market. Monday and Tuesday are Christmas holidays, and Wednesday is no news. On Thursday, we have US Initial Jobless Claims, Pending Home Sales and Crude Oil Inventories.
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