The dollar index eases from new 2023 high (106.52) on Thursday, as bulls faced headwinds from overbought condition on daily chart and top of thickening weekly Ichimoku cloud (106.61).
The greenback remains well supported by better than expected conditions of the US economy and signals that the Fed would likely hike again and keep high interest rates for longer period, which sets scope for further advance.
Pullback on partial profit-taking was so far seen as positioning for fresh push higher as the index is in uninterrupted uptrend for the eleventh straight week and is about to register the second consecutive monthly gain, with the notion being supported by formation of reversal pattern after a bear trap on monthly chart.
Daily studies, on the other hand, show space for corrective dip, which should be ideally contained by bull-trendline drawn off 99.20 (July 18 low) currently at 105.38, reinforced by rising 10DMA and weekly cloud base.
Break through weekly cloud top and nearby 50% retracement of 114.72/99.20 (106.96) to generate fresh bullish signal for extension of larger uptrend and expose target at 108.79 (Fibo 61.8%).
Res: 106.61; 106.96; 107.88; 108.79.
Sup: 105.85; 105.38; 105.13; 105.00.
 on Thursday, as bulls faced headwinds from overbought condition on daily chart and top of thickening weekly Ichimoku cloud (106.61).){kind=link}