Dollar bears re-grouping ahead of key support points
Aug 29 (Reuters) -A modest lift in the dollar index away from last week's 100.60 low point could extend, as oversold technicals signal a potential shift in near-term bias.
The dollar is languishing at levels not seen since July 2023 and the current bear run is threatening to drop below key support points on the weekly chart. The 200-week moving average is currently at 100.33 and has supported the dollar since January 2022. A weekly low from July 2023 is at 99.55 and a 76.4% Fibonacci retracement level is at 98.98, taken off the 89.21-114.78 January 2021 to September 2022 rally.
The USD index, which tracks the dollar against a basket of six major currencies, broke below the December 100.61 base last week. Fourteen-week momentum remains negative, reinforcing the overall bearish market structure and highlighting the underlying risk for the U.S. currency to drop further.
However, a corrective phase, with dollar bears re-grouping, would keep the two-month bear trend healthy and could provide better selling opportunities. The minimum correction level taken off the recent 106.13-100.60 drop is at 101.91.
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Dollar index weekly chart: https://tmsnrt.rs/4g3XDr1
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
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