Dollar index under pressure at 103,60 before Powell’s speech

• Since the beginning of the week, the dollar index has been in constant retreat. 

Dollar index chart analysis

Since the beginning of the week, the dollar index has been in constant retreat. On the upside, we encounter resistance at the 104.00 level and the EMA200 moving average. Yesterday, we saw the dollar pull back to 103.58, forming a new weekly high there. That was followed by an attempt to recover to the 103.90 level. This is where the bullish attempt stops, and we start a new pullback.

Now, we have an opportunity to test yesterday’s low because the dollar has dropped to the 103.60 level. There is a big fight for new support because if the support does not last, the dollar slides to a new low, intensifying the bearish pressure that is present. Potential lower targets are the 103.50 and 103.40 levels.

Did they have the strength to start the recovery?

If the dollar manages to stay above the 103.60 level, it will have a new opportunity to return to the zone around the 104.00 level. Returning to that zone gives the dollar a chance to return to the bullish side and move as far as possible from this week’s low. By breaking above the EMA200, we get rid of the bearish embrace and can hope for a bullish correction. Potential higher targets are 104.10 and 104.20 levels.

In the afternoon, we have a speech by Fed Chairman Jerome Powell. His speech could be key to the Fed’s future monetary policy. Powell will base his decisions on the level of interest rates on the strength of inflation and its assessment for the next period. Tomorrow, the ECB presents its decision on its interest rate, and the forecasts are that it will keep it at the same level.