Dollar Index outlook: Remains in red as markets await Powell's speech
The dollar index returned to red on Monday after a gap higher opening in market reaction on assassination attempt on former President Donald Trump, though dollar-negative sentiment on growing expectations for September Fed rate cut, dominated during European and early US session.
Bears pressure supports at103.69/61 (last Friday low / June 7 low), on track for the second consecutive daily close below pivotal Fibo support at 103.82 (61.8% of 102.26/106.36 ascend), which would reinforce bearish signal.
Firm break of 103.69/61 pivots to risk acceleration towards 103.22/00 (Fibo 76.4% / psychological).
Technical picture on daily chart is firmly bearish, with strong negative momentum and multiple MA bear-crosses (the latest was attempt to form 5/200DMA death-cross) adding to bearish near-term outlook.
However, speech of Fed Chair Powell, due later today, is also in focus, with comments about the central bank’s next steps regarding monetary policy, expected to have strong impact on dollar.
Dovish stance will reinforce growing expectations for rate cut and push the dollar further down, while hawkish comments would harm larger bears and give fresh boost to the currency, with lift above 200DMA (104.22) and violation of daily cloud base (104.49) seen as minimum requirement to revive bulls.
Res: 104.00; 104.22; 104.49; 104.74
Sup: 103.61; 103.22; 103.00; 102.80
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.
