Dollar index chart analysis

On Friday, we saw a pullback of the dollar index to 105.65 levels. At that level, the dollar gains support and begins a bullish consolidation, closing the week above the 106.00 level. During the Asian trading session, we saw movement around the 106.30 level. At the beginning of the EU session, there was instability on the chart and the dollar withdrawal to the 106.05 level.

After that, we get new support, start bullish consolidation, and climb up to 106.50. If this consolidation continues, we could soon test last week’s resistance zone around the 106.80 level. Potential higher targets are 106.90 and 107.00 levels. The previous time we were at the 107.00 level was in November last year.

We need a negative consolidation and a new pullback to the 106.00 support level for a bearish option. A fall below it would increase the uncertainty on the chart, which would likely have a negative impact on the dollar index. Potential lower targets are 105.80 and 105.60 levels.

Economic news will be dominated by news from the US market again this week; from the others, we single out the RBA and RBNZ decisions on interest rates. Interest rates are expected to remain at the same levels as the previous ones. At Friday’s end of the week, we will have NFP and unemployment rate reports.

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