Bulls remain in play but face strong headwinds
The dollar index remains at the front foot, underpinned by dominating factors, such as high inflation, rising interest rates and global growth concerns.
Bounce from Aug 10/11 double-bottom (104.50) retraced 50% of corrective 109.12/104.50 downleg, with bulls being supported by rising daily cloud, but started to lose traction in past three days after strong acceleration last Mon/Fri.
Rally faces strong headwinds from significant barrier at 106.81 (daily Kijun-sen / 50% retracement) and holding below here for the third consecutive day, though the sentiment remains positive and current congestion is seen as a consolidation ahead of fresh push higher, with positive stance seen while the price action stays above daily cloud top, also current range floor (106.20).
Strengthening positive momentum and daily moving averages turning to full bullish configuration, along with rising daily cloud underpinning the action, point to positive technical studies on daily chart and adding to supportive fundamentals.
Eventual break of 106.81 pivot would signal bullish continuation and expose next strong obstacle at 107.36 (Fibo 61.8%) break of which is needed to confirm higher base at 104.50 and an end of corrective phase from 109.12 (July 14 top).
Res: 106.81; 107.12; 107.36; 108.03
Sup: 106.41; 106.20; 106.02; 105.68