The dollar index today is very bullish above 104.30 level

The dollar index managed to stop the previous bearish consolidation at the 104.00 support level. 

Dollar index chart analysis

The dollar index managed to stop the previous bearish consolidation at the 104.00 support level. Yesterday, we tested that level on two occasions, after which we turned to the bullish side. During this morning’s Asian trading session, the index climbed above the previous high at 104.30. With this step, we see a double bottom formation, which confirms a continuation to the bullish side.

Potential higher targets are 104.40 and 104.50 levels. The dollar index could have additional resistance in the EMA200 moving average in the zone of 104.55. We need a new negative consolidation and a pullback below the EMA50 moving average for a bearish option.

Will the dollar index continue to rise, or is this recovery short-term?

By descending to 104.20, we move to the bearish side and approach the daily open price at 104.15. Further instability and weakening of the dollar leads to a continuation of the pullback to support tests in this week’s zone, around 104.00. Potential lower targets are 103.90 and 103.80 levels.

In the afternoon hours in the US session, we have a lot of important news that could increase market volatility. The first are the ADP Nonfarm Employment Change and the S&P Global Services PMI. Then, the Bank of Canada will announce its future interest rate. Economists expect the interest rate to decrease from 5.00% to 4.75%. Fifteen minutes after that news, we have ISM Non-Manufacturing PMI, ISM Non-Manufacturing Prices and Crude Oil Inventories. A stormy US session is expected.

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