Dollar index rises to three-week high, fueled by global risk aversion
The dollar index rose further on Thursday, as strong bullish acceleration was fueled global risk aversion amid worsening situation with Covid-19 pandemic in the US and Europe as well as rising uncertainty over talks about new US stimulus package and next Tuesday’s presidential election.
A record pace of recovery in US Q3 GDP, gradual reduction in jobless claims and ECB in line with expectations, contribute to dollar’s fresh strength.
Studies point to further advance as Wednesday’s close above 93.33/35 pivots (Fibo 38.2% of 94.78/92.44 / trendline resistance/ 20DMA) generated bullish signal which seeks confirmation on today’s close above cracked Fibo barrier at 93.88 (61.8% of 94.78/92.44) to open way for extension towards falling 100DMA (94.29).
Rising bullish momentum on daily chart and moving averages in bullish setup, add po positive signal, however bulls may face headwinds, as stochastic is overbought.
Broken Fibo 50% and 30DMA (93.61/56) offer initial supports which should keep the downside protected and guard key levels at 93.33/35, now reverted to solid support.
Res: 94.07; 94.22; 94.29; 94.65
Sup: 93.75; 93.60; 93.33; 93.26