Index Dollar Outlook: The dollar remains at the back foot on optimism over economic recovery

Slobodan Drvenica Windsor Brokers

The dollar remains in red on Monday and probes again through cracked 200WMA (96.30), pressuring supports at 96.18/16 (Fibo 76.4% of 95.68/97.78 / last Thursday’s low).

Larger downtrend remains intact, with past three weeks action in red and today’s fresh extension lower, suggesting that 95.68/97.78 action might be over.

The greenback’s sentiment is negative as traders move into riskier assets in anticipation that the worst of coronavirus negative impact has been already seen, with optimism about positive economic outlook to be justified by series of economic data due this week and US corporate earnings reports.

Bears look for close below 96.18/16 pivots, which mark the last obstacles en-route towards 95.68 (10 June low), violation of which would unmask key support at 94.59 (2020 low, posted on 9 Mar).

Daily studies in firm bearish setup support scenario, with broken Fibo 61.8% support (96.48) which contained several attacks in past few weeks, expected to keep the upside protected.

Res: 96.48; 96.73; 96.84; 96.98
Sup: 96.16; 95.87; 95.68; 95.16

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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