US Dollar Index
The dollar is holding near the new highest in over 16 months on Monday, maintaining a positive tone on growing hopes that Fed may accelerate tapering stimulus and open way for earlier than expected rate hike, as inflation continues to rise, colliding with US central bank’s stance that increased price pressures are transitory.
The dollar index advanced 1% last week after a strong bullish signal was generated on the previous week’s close above pivotal barrier at 94.76 (Fibo 38.2% of larger 103.80/89.15 fall/200DMA), with bulls pressuring key Fibo level at 96.47 (50% retracement).
Weakening bullish momentum on daily chart signals that bulls face headwinds (already registered two upside rejections) and may hold in extended consolidation before bulls continue.
Firm break of 96.47 barriers would risk extension towards 97.70 (mid-June lower platform and 98.20 (Fibo 61.8% of 103.80/89.15).
Broken barrier at 94.74 (Fibo/200DMA) reverted to strong support, which should contain possible extended dips and keep bulls in play.
Res: 96.25; 96.47; 97.70; 98.20.
Sup: 95.83; 95.10; 94.74; 94.45.
