The dollar extends recovery against the basket of major currencies on fresh acceleration after upbeat US retail sales data. The greenback received fresh boost from July retail sales overshoot which comes as continuation of bullish signals from Fed Dudley’s hawkish comments on Monday.
Both work in favor of Fed normalization scenario supporters, who turn focus towards economic data as inflation showed no signs of rebounding in the near future.
The dollar index broke above previous high at 93.75 and dented psychological 94.00 barrier after data. The price is riding on the third wave (from 92.82 trough) of five-wave cycle from 92.37 (02 Aug low) which eyes strong barriers at 94.16 (daily Kijun-sen) and 94.21 (FE 100%) break of which is needed to validate wave principles and open way for further upside.
Next target lies at 94.55 (FE 123.6%) ahead of more significant double-Fibonacci barrier at 94.75 (FE 161.8% and Fibo 61.8% retracement of 96.24/92.37 downleg).
Strong bullish momentum is building up and supports further advance.
Broken daily Tenkan-sen (93.28) now acts as solid support and underpins the action.
Res: 94.16; 94.21; 94.55; 94.75
Sup: 93.76; 93.42; 93.28; 92.82
