The dollar index remains constructive and holding near three-week high in early Friday, despite that the rally in past three days was rejected on Thursday (inverted hammer).
Short-term action holds in extended consolidation, entrenched within 105.14/107.03 range, under new 2023 high (peak of an uptrend from 99.20, July 18 low).
Larger bulls remain intact and keep in play expectations for continuation of larger uptrend after consolidative phase ends, with violation of pivotal 107 resistance zone (50% retracement of 114.72/99.20 downtrend of Sep 22/July 23/new 2023 high) to expose targets at 107.88 (22 Nov 2022 high) and 108.79 (Fibo 61.8% of 114.72/99.20).
Technical studies are bullish on both daily and weekly chart, though overbought daily conditions suggest that the action may hold within current range for some time.
Only firm break of range floor (105.27/14 higher base, also Fibo 23.6% of 99.20/107.03 uptrend) would weaken the structure and risk deeper pullback.
Fundamentals also work in favor of dollar, as US economy remains resilient and outperforms other major economies (EU, China, Japan), which will help Fed to keep high interest rates for longer period than other major central banks, while growing geopolitical tensions fuel risk aversion and also underpin safe-haven dollar.
Res: 106.76; 107.03; 107.88; 108.79.
Sup: 106.32; 106.00; 105.28; 105.14.
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