The dollar index jumped this week to the 107.34 level

Dollar index chart analysis

The start of this week was great for the dollar as we formed a new high at the 107.34 level. In the continuation, we did not manage to break above, and a retreat followed. Yesterday, we saw the formation of support at the 106.35 level. During the previous Asian session, the dollar tried to recover, but that attempt stopped at the 106.55 level. After that, we started a new pullback and retested the support at the 106.35 level.

We need a negative consolidation and a break below the 106.35 level for a bearish option. This would lead to the formation of this week’s new low, which would indicate a potential further drop in the dollar index. Potential lower targets are 106.20 and 106.10 levels.

We need a positive consolidation and a new high above the 106.55 level for a bullish option. So, we would go back above the EMA50 moving average and get its support. Potential higher targets are 106.70 and 106.80 levels.

Important US economic news awaits us today: Average Hourly Earnings, NFP and Unemployment reports. The movement of the dollar index will also depend on the report.

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