US Dollar Index outlook: Bears are consolidating above 90 support zone
|US Dollar Index
Bears dented psychological 90 support on Monday but faced headwinds here that resulted in bullish close after strong bearish acceleration on Thu/Fri.
Disappointing US jobs data further eroded hopes for potential Fed’s policy review earlier than expected, with focus on Wednesday’s release of the US inflation report for April.
The US central bank argument that increased inflation pressures as transitory and delayed reaction could be risky, justifies their stance of prolonged ultra-loose policy.
Partial profit-taking after two-day 1.2% drop may keep bears on hold, with limited upticks to provide better opportunities to re-enter bearish market, as larger downtrend from 93.45 (2021 high) remains intact and generated fresh bearish signals on break of pivotal supports at 90.79 (61.8% of 89.15/93.45) and 90.37 (former low of Apr 29.
Daily chart shows moving averages in full bearish setup, with multiple bear-crosses, adding to bearish pressure, while momentum remains in negative territory for the past month, but oversold stochastic adds to signals of consolidation before bears resume.
Firm break of cracked pivotal supports at 90.16/00 (Fibo 76.4% of 89.15/93.45 / psychological) would expose initial target at 89.66 (Feb 25 spike low) and risk test of key support at 89.15 (2021 high posted on Jan 6).
Res: 90.37; 90.56; 90.79; 90.96.
Sup: 90.16; 90.00; 89.66; 89.15.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.