The dollar index rose to a fresh twenty-year high on Thursday, as concerns that tightening monetary policies in attempts to put raging inflation under control would impact global economy, accelerated migration into safety that further lifted the greenback.
The data on Wednesday showed that inflation eased in April but is likely to stay high in coming months, adding to expectations that the US central bank may take more aggressive steps in coming policy meetings this year.
Fresh acceleration higher this week, broke above critical resistance at 103.80 (peaks of 2017/2020) and is on track to eventually register a weekly close above this barrier that would add to strong bullish signals.
Firm break of 103.80 pivot would open way for attack at Dec 2002 high (107.40), with stronger acceleration to challenge Fibo 138.2% projection (109.39) and psychological 110 level.
Overbought conditions on daily and weekly chart studies were so far ignored, as extremely supportive fundamentals continue to lift the dollar, however some price adjustment can be expected in coming sessions, with dips to offer better buying opportunities.
Former critical resistance at 103.80 reverted to solid support, reinforced by rising 10DMA (103.62).
Res: 104.73; 105.00; 105.50; 107.40
Sup: 103.80; 103.62; 103.38; 102.55
