Dollar Index Lags Ahead of Crucial US Data Release
The dollar index continues its downward trend for the third consecutive day, retracting from its recent multi-week high of 104.83.
Bearish sentiment persists as fresh pressure weighs on critical support levels at 103.84/80, representing the Fibonacci 38.2% retracement of the range from 102.26 to 104.83, and coinciding with the upper boundary of the substantial daily Ichimoku cloud. Additional barriers lie in the 103.60/40 zone, where the 20-day, 55-day, and 200-day moving averages converge, along with the 50% retracement level.
A decisive breach of these support levels would further undermine the short-term market structure, potentially leading to a deeper decline. Conversely, maintaining ground above these levels would suggest a healthy correction and uphold the near-term bullish bias.
While daily indicators predominantly signal bullish momentum, the 14-day momentum indicator points southward, signaling potential downside risk if it enters negative territory.
Market participants await the release of remaining reports from the US labor sector, including weekly jobless claims today and Non-Farm Payrolls (NFP) data on Friday. These releases will offer a comprehensive view of the labor market conditions in March, furnishing additional evidence for Federal Reserve policymakers. Expectations for an initial interest rate cut in June remain elevated, although recent comments from Fed Chair Powell have tempered such anticipations. Powell reiterated the Fed’s commitment to data-driven decision-making, suggesting that policymakers will closely monitor economic indicators before adjusting monetary policy.
Res: 104.01; 104.20; 104.57; 104.83
Sup: 103.80; 103.50; 103.24; 103.00
