The dollar index extended near-term weakness zone after dovish Fed further soured the sentiment.
Although the US central bank pointed to strong economic recovery, changed rhetoric about the health condition, which is not any more the key obstacle for recovery, and moved expected time for the first rate hike from 2024 to 2023, the tone was still dovish and disappointed investors who expected more aggressive approach.
Pullback from new three-month high at 93.18 (July 21 peak) accelerated and cracked initial support at 92.00 zone, which guards more significant levels at 91.77 (Fibo 38.32% of 89.50/91.18).
Close below 92.00 would generate initial bearish signal, but break of 91.77 pivot is needed to confirm reversal.
Daily studies are still mixed as MA’s (10/20/30) turned to bearish setup, momentum is neutral and moving along the centreline, while stochastic is oversold, but stronger bearish signal is developing on weekly chart, as the index is on track for the biggest weekly drop since the first week of May and stochastic and RSI are heading south.
Also, the index is about to end month in red with shooting candle on monthly chart, adding to negative signals.
Res: 92.31, 92.50, 92.64, 92.83.
Sup: 91.96, 91.77, 91.50, 91.36.