The dollar index returns above 104.00 ahead of US GDP news

The previous bearish trend of the dollar index was stopped yesterday at the 103.60 level. 

Dollar index chart analysis

The previous bearish trend of the dollar index was stopped yesterday at the 103.60 level. In that zone, the dollar gains support and turns to the bullish side. During this morning’s Asian trading session, the bullish consolidation of the dollar above the 104.00 level continued. In the EU session, the index continues to dominate and forms a weekly high at the 104.25 level.

From that level, we make a slight pullback to the 104.00 level and manage to maintain above it. In that zone, we get additional support in the EMA200 moving average, and the dollar starts a new bullish consolidation. We expect to see a break above 104.25 soon and form a new high. Potential higher targets are 104.30 and 104.40 levels.

Does the dollar index have the strength to drive more concrete growth?

We need a new negative consolidation and a drop below the EMA200 and 104.00 levels for the bearish side. This further increases the pressure on the index to start a further retreat. We are again looking at the 103.80 daily open price as a possible level where we could stop the axis. Potential lower targets are 103.70 and 103.60 levels.

At the beginning of the US session, the US economy’s important news is GDP. Forecasts are that there could be a decrease from 4.9% to 3.3%, as analysts predict. This news will definitely have an effect on the dollar chart no matter what is released. Tomorrow, we will highlight the German CPI, US Core PCE Price index, Initial Jobless Claims and Chicago PMI index. For Friday, we have Eurozone inflation and the Chinese Manufacturing PMI index.

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