Dollar index breaks psychological 100 support and hits the lowest in over one year
The dollar index holds firmly in red for the seventh consecutive day and on track for the biggest weekly loss in thirteen months, deflated by expectations that the Fed may end its tightening cycle in the near future and additionally pressured by softer than expected US inflation numbers, which additionally support the notion.
Significant bearish signal was generated on break of the base of range of past six months (102.50 zone) and was boosted by break of psychological 100 support on Thursday.
Market sentiment on US interest rates got calmer on wide expectations that rates will not rise above 5.25% / 5.50% range and growing hopes that the central bank will start easing its policy in early 2024.
Fresh push lower after a multi-month consolidation signals continuation of larger downtrend from 114.72 (2022 peak) and adds pressure on greenback.
Bears eye pivotal Fibo support at 98.92 (61.8% retracement of 89.15/114.72 (Jan 2021 / Sep 2022 rally) violation of which to confirm the start of fresh bear-cycle.
Meanwhile, bears may take a breather as daily studies are deeply oversold and may prompt traders to collect some profits after a nearly 2.5% weekly loss.
Consolidation is likely to be limited, as bearish sentiment is strong, with broken 100.45/00 supports, reverted to solid resistances, expected to ideally cap upticks.
Res: 100.00; 100.45; 100.77; 101.48
Sup: 99.24; 98.92; 98.15; 97.89