The dollar index falls to a new daily low of 103.75

• During the Asian trading session, the dollar index tried to maintain above the 104.00 level.

Dollar index chart analysis

During the Asian trading session, the dollar index tried to maintain above the 104.00 level. As we got closer to the EU trading session, the dollar began to weaken and move away from the 104.00 level. The EU session shows a bearish consolidation and an index retreat to 103.75 levels.

With this, we formed a new low compared to the previous one from Friday, which was at the 103.80 level. Bearish momentum is still strong, and we expect the dollar to drop to lower levels. Potential lower targets are 103.60 and 103.50 levels. Last week’s low dollar index was at the 103.43 level.

Did the dollar index have the strength to get back above 104.00, or is a deeper decline coming?

For a bullish option, we need first to form a bottom from which we can initiate a new positive consolidation. To begin with, let’s stay above the 103.80 level. After that, we need a return to the 104.00 level. In addition to that level, we also test the EMA200 moving average.

By breaking above, we get rid of bearish pressure and create a better position for further recovery. Potential higher targets are 104.10 and 104.20 levels. This week, we have a higher volume of economic news from all three markets, and with that, we expect higher volatility of the dollar index. Today, we highlight the news of New Home Sales from the US market, while there is not so much significant news in the EU session. From tomorrow, we have an increased number of important events: USD GDP and RBNZ interest rate decision, and by the end of the week, German CPI, EU CPI, US Chicago PMI, Chinese Manufacturing PMI index, etc…

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