The dollar index edged higher after opening with gap higher on Monday, lifted by a significant shift in rhetorics pf President-elect Donald Trump, who turned his aims for weaker dollar to fight trade war, to threats to BRICS member countries of facing a 100% tariffs if create new or support another currency in attempts to replace dollar.
Fresh rise of dollar generated initial signal of reversal after a four-day pullback was contained rising channel support trendline, reinforced by daily Kijun-sen (at 105.60 zone), although more work at the upside is required to confirm signal.
Break of immediate resistances at 106.50 zone (Fibo 38.2% of 108.04/105.57 bear-leg / 10DMA) to firm near-term structure for attack at next pivot at 106.81 (50% retracement / daily Tenkan-sen), violation of which to shift near term focus to the upside and signal that corrective phase might be over.
Technical picture on daily chart is overall bullish, as 14-d momentum is in positive territory and turning up, stochastic is emerging from oversold zone and converging 55/200DMA’s are signaling possible formation of Golden Cross.
Near-term action is expected to remain biased higher while holding within month long bull-channel and pointing to steady uptrend.
Res: 106.50; 106.81; 107.10; 107.46.
Sup: 106.09; 105.60; 105.32; 105.00.