By The dollar index is close to testing the September low
- At this morning’s market opening, the dollar index made a bearish gap from 101.10 to 101.00
Dollar index chart analysis
At this morning’s market opening, the dollar index made a bearish gap from 101.10 to 101.00. During the Asian trading session, the index continued to retreat, falling below the 100.90 Friday low. In the EU session, the trend continued until the new low at 100.66. The bearish trend looks very strong, and everything indicates that we will see a further pullback and the formation of a new weekly low.
The next low that the dollar index could pay attention to is 100.58 from September 6, while the annual low is a step lower at 100.51. For a bullish option, we need to see a pullback stop and a bottom forming. If we succeed in this, the chances of starting a bullish consolidation increase. The return of the dollar index to the 101.00 level would be a good start to continue on the bullish side. We expect to see the gap closing with the market opening this morning.
The index is about to return to a new September low if it continues with the current trend
With that move, we move above 101.10 and will get support from the EMA 50 moving average to continue to the bullish side. Potential higher targets are 101.20 and 101.30 levels. Additional resistance could be found in the EMA200 moving average in the 101.30 zone.
We have no important economic news today. On Tuesday, we have August’s US Core Retail Sales and Retail Sales. Wednesday brings us many important news: British CPI and Eurozone CPI in the EU session. In the afternoon, during the US session, the Fed will announce the future interest rate. Forecasts are that the interest rate could drop from 5.50% to 5.25%. The interest rate cut should have a negative effect on the dollar by weakening it. Half an hour after that announcement, we will have a press conference of representatives of the FOMC.
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