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The dollar index rose above 102.50 after Friday’s top news
- On Friday, the dollar index rose to 102.68, forming a new October high
Dollar index chart analysis
On Friday, the dollar index rose to 102.68, forming a new October high. Positive news for NFP, The unemployment rate and Average Hourly Earnings influenced us to see a strong bullish impulse from 101.85 to 102.60. At the end of the day, the index stopped at 102.48.
During this morning’s Asian trading session, the movement was in a narrow range of 102.40-102.60. The market is very calm for now, and we will probably see more volatility on the chart only during the US session. An impulse to 102.80 would be an excellent sign that we continue on the bullish side. After that, we expect the dollar index to reach 103.00 levels. The previous time we were at that level was a month and a half ago.
The index could take a step lower this week to consolidate better
For a bearish option, we need a negative consolidation and a drop below the 102.40 level. Thus, we move to a new daily low and confirm the bearish pressure on the dollar. After that, we should see a further pullback to 102.20. There, we will come across the EMA 50 moving average, which was stable support for us last week. This time, we are looking for a break below and a continuation of the path to the bearish side. Potential lower targets are 102.00 and 101.80 levels.
This week, the volume of important economic news is lower. Tomorrow, RBNZ plans to cut interest rates from 5.25% to $4.75, later in the US session, US Crude Oil Inventories, 10-year Note Auction, and FOMC Meeting Minutes. The FOMC meeting could affect the larger movements of the dollar index. Hints of future monetary policy: The interest rate cut by the Fed is the most important report for the US currency. Friday’s news showed that the US economy is stable. That should be a good sign that the Fed should continue to cut interest rates to keep pushing the US economy.
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