Bears are pausing ahead of key supports
The dollar index edged higher on Monday as bears pause after nearly 5% fall last week (the biggest weekly loss since 2009) on rising uncertainty over prolonged global lockdown on coronavirus pandemic.
Fresh upside action could be seen as positioning for further weakness as last Friday’s trading penetrated daily cloud and closed within the cloud, generating negative signal.
In addition, increased number of net short dollar positions contributes to bearish outlook.
Extended upticks should stay below psychological $100 level (also last Friday’s high) to keep bears intact.
Violation of key supports at 98.11 (Fibo 61.8% of 94.59/103.80 rally); 97.90 (daily cloud base) and 97.79 (200DMA) would generate strong bearish signal for continuation of fall from 103.80 (20 Mar high).
Res: 99.19; 100.00; 100.28; 101.07
Sup: 98.48; 98.33; 98.11; 97.90