The dollar index is at the threshold of the level of 104.50

Dollar index chart analysis

Yesterday, the dollar index was forced to retreat to the 104.00 level, forming a weekly low there. After that, a bullish consolidation was initiated, and we quickly returned above the 104.30 level. During the Asian trading session, the index continues to hold above that level and advances to 104.40. The dollar fluctuates in the EU session, and we move in the 104.25-104.40 range.

We are increasingly clinging to the 104.40 level, which could influence us to see a break above soon and climb to a new daily high. The weekly open price is close to the 104.43 level, and moving above the dollar will erase all losses in the first two days of this week. Potential higher targets are 104.45 and 104.50 levels.

We need a break above 104.40 for a bullish continuation, can the dollar do it?

We need to go back below the 104.25 level for a bearish option. There we test possible support in the EMA50 moving average. A new bearish impulse sends us below to a new daily low and thus increases the pressure on the index. This would trigger the continuation of bearish consolidation, and the index would slide to lower levels. Potential lower targets are 104.20 and 104.15 levels.

Among today’s important news from the US market, we will have news about oil stocks, and then, towards the end of the session, FED representative Waller will speak. An interesting day awaits us tomorrow. Data on British GDP will be published in the EU session. Economists forecast that a decline in Gross Domestic Product is expected. Then we have Switzerland’s KOF Leading indicator, Germany’s unemployment news and in the afternoon, US GDP, Initial Jobless Claims and Chicago PMI.

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