The dollar index is facing major challenges next week
- This week, the dollar passed in a sideways consolidation in the 106.00-106.80 range.
Dollar index chart analysis
This week, the dollar passed in a sideways consolidation in the 106.00-106.80 range. On several occasions, we tested the lower and upper resistance lines. Today, we encounter resistance at the 106.40 level, somewhere in the middle of this range.
From that level, the dollar makes a bearish impulse and retreats to 106.20, approaching the support zone again. We are now monitoring the movement of the index because a breakout below and the formation of a new weekly low could occur.
Potential lower targets are 105.80 and 105.60 levels. We need a positive consolidation and a return above the 106.40 level for a bullish option. Then, we would have to hold up there in order to start a further recovery of the dollar index with a new impulse. Potential higher targets are 106.60 and 106.80 levels.
Important economic news
Next week is filled with a lot of important economic news from all markets. The ECB will present its view on future interest rates on Thursday, and later that day, we will have an ECB press conference. A day earlier, on Wednesday, the Bank of Canada will announce the future interest rate, and later, Fed Chairman Powell will make his speech. Other economic news is US GDP, Services PMI, Building Permits, Core PCE Price Index, etc.
