The dollar index under pressure ahead of Friday’s NFP report

• Since we fell below the EMA200 moving average last Friday, the troubles for the dollar index began. 

Dollar index chart analysis

Since we fell below the EMA200 moving average last Friday, the troubles for the dollar index began. On Monday and Tuesday, we tried to move above the 103.80 level. We failed in that, which led to the start of a strong bearish consolidation on Wednesday and the continuation of the fall of the dollar. By the end of the day, the value of the index dropped to 103.20 levels.

Yesterday, we saw an attempt to maintain above that level, and with the beginning of the US session, the dollar index started to weaken again and continued the bearish consolidation. We fall below the 103.00 level and do not stop there but continue to slide below the 102.80 level.

The dollar is under strong pressure to fall even lower

During this morning’s Asian session, the dollar tried to start a bullish consolidation, but it was stopped at 102.90. After that, we see a new pullback to the 102.72 level. A break below and a drop to a new weekly low could happen soon. Potential lower targets are 102.60 and 102.50 levels.

In the afternoon of the US session, we will have important news from the US economy: NFP, Average Hourly Earnings, and Unemployment Rate. Depending on this news depends on the future movement of the dollar. Expectations for Nonfarm Payrolls are 198K, and the previous report was 353K. Bad news will bring the dollar down, while good news can push it up and start a bullish trend.