The dollar index is consolidating above its one-month low, with prospects for further losses

On Friday, the dollar index remained defensive, consolidating below a new one-month low of 103.74 set after Thursday’s 0.8% decline.

The weaker-than-expected US CPI data for June deflated the greenback, increasing expectations for a Fed rate cut in September.

Technically, the picture remains bearish, with Thursday’s close below the 200-day moving average (104.23), which has now become solid resistance, signaling a fresh bearish trend.

This marks the dollar index’s second consecutive weekly loss, with a weekly close below the breached Fibonacci support at 103.61 (76.4% retracement of the range from 103.61 to 105.78) likely reinforcing the bearish sentiment and potentially testing key short-term support at 103.61 (June 7 low). A loss of this level could complete a failure swing pattern on the daily chart, indicating a risk of deeper declines.

Any upward movement is likely to face resistance near the daily Ichimoku cloud top at 104.49.

Res: 104.23; 104.44; 104.49; 104.70
Sup: 103.74; 103.61; 103.33; 103.00