The dollar index has been in a bullish trend since Thursday

• Last Tuesday, the dollar index was above 105.00 for the first time this year. 

Dollar index chart analysis

Last Tuesday, the dollar index was above 105.00 for the first time this year. After forming a high at 105.10, the index initiated a pullback first to support at the 104.70 level. We managed to hold above for a while on Wednesday, after which there was a strong bearish impulse and a drop to 103.91 on Thursday morning.

By the end of the week, we saw attempts by the dollar to start a recovery, and it succeeded by retesting the 104.70 level. We then move back down to 104.25, our new support. During the Asian trading session, we consolidated slightly bullish and tried to break above the 104.40 level. For now, we are below it, but we have the support of the EMA200 moving average, which could positively affect the dollar index.

Do we have the strength to see a stronger dollar bullish impulse?

Potential higher targets are 104.50 and 104.60 levels. We need a break below the 104.25 support level for a bearish option. With that move, we go to a new daily low and confirm that the dollar index is under bearish pressure. Potential lower targets are 104.10 and 104.00 levels. it is also possible to test last week’s low at 103.90 level.

This week is filled with economic news that could shake all currencies. On Wednesday, in the Asian session, the RBNZ will announce the future interest rate. Forecasts are that they will leave it at the same level. On the same day, but in the US session, we have US inflation, oil stocks and the FOMC meeting. Thursday will be marked by the ECB’s announcement of their interest rate, and no rate changes are expected here.