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Dollar index recovers somewhat from lows
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20- and 200-day SMAs post bearish cross
The dollar index plummeted to a new four-and-a-half month low of 101.36 on Thursday and is currently recouping some losses. The downfall from the eleven-month high of 107.00 is continuing, with the market’s outlook changing to bearish. The MACD is extending its negative momentum beneath its trigger line; however, the RSI is rebounding off the 30 level to mirror the latest market price action.
Should the trendline at 101.52 crack, the price could initially test the 100.27 support level, registered on July 27. Sliding lower, the 99.20 barricade may halt bearish actions.
In the positive scenario where the index snaps the 61.8% Fibonacci retracement level of the up leg from 99.20 to 107.00 at 102.20, the next target would be the 102.35 level. Running higher, the bulls would need to drive beyond 50.0% Fibonacci of 103.10, which holds near the bearish crossover within the 20- and the 200-day simple moving averages (SMAs).
As regards the short-term outlook, the dollar index is maintaining a bearish tendency, confirmed by the SMAs and the MACD oscillator.
