Dollar Index Outlook: Fresh weakness retests key support at 96.48

Slobodan Drvenica Windsor Brokers

US DOLLAR INDEX

The dollar index stands at the back foot in early Friday and attacks again key support at 96.48 (200DMA / Fibo 38.2% of 95.35/97.18 upleg).
Thursday’s advance after stronger than expected US inflation data lowered expectations for 0.5% rate cut (that was initially boosted by comments from Fed’s chief Powell) was short-lived and fresh selling started in Asia.
Renewed weakness after Thursday’s long-tailed Doji signals continuation of pullback from 97.18 high (9 July), but bears must break 96.48 pivot to spark fresh acceleration lower and expose targets at 96.26/05 (Fibo 50% and 61.8% respectively).
Technical studies are in mixed mode on daily chart and lack clearer direction signal, as momentum remains strong, but MA’s are in mixed setup and RSI / Stochastic are negative.
Repeated failure to break lower could keep the price in extended consolidation, with initial bullish signal expected on lift above 100DMA (96.79).

Res: 96.59; 96.79; 96.96; 97.18
Sup: 96.48; 96.36; 96.26; 96.05

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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