Dollar index a bearish monthly close on Friday as it closed below 93.50, which is 23.6% fibonacci retracement level of rally seen from April 2008 low to Dec 2015 high.
A look at monthly chart shows -
A look at monthly chart shows -
- Bearish 5-MA and 10-DMA monthly chart with a bearish close below 93.50 indicates bears in control and may be able to push the index down to 89.16 levels (38.2% Fib), unless we see a solid rebound from key support range of 92.29 (May 2004 high)-92.63 (Nov 2005 high & Aug 2015 low).
- Watch out for a corrective rally to 93.50 as the index is oversold as per daily RSI.
- A sharp correction could happen only if the US wage growth figure due this Friday surprises on the higher side. A strong NFP along would not be enough.
- In the near-term area around 95.50-96.00 is likely to restrict recovery in the index, unless Fed policymakers talk up rate hike bets.
- On the other hand, a weak wage growth data this Friday would open doors for a slide to 38.2% Fib level of 89.16 levels.
