Despite strong bearish sentiment which prevailed early on Monday, the US Dollar failed to move below the combined support of the 55-day SMA, monthly PP and weekly S1 at 109.40. From above, the pair was restricted by the breached channel line and the 55-hour SMA at 109.80.
Taking into account these two strong barriers, the rate might be bound to continue moving sideways during the first part of the day. The highest point could be the weekly PP and the 100-hour SMA at 110.10, while support should be provided by the aforementioned 109.40 level.
Technical signals show that a breakout is more likely to occur to the downside. In this scenario, the Greenback would target the 50.00% Fibo retracement at 109.15.
