Forex Trading For Beginners 2021: US Dollar Index Outlook: Dollar Hits New Multi-Month High

US Dollar Index

The dollar index extends gains into fifth straight day and hits new highest levels since early June on Friday.

Global risk aversion on growing fears over consequences of fresh spread of Delta variant which already caused new lockdowns in some countries and overheated situation in Afghanistan, prompted investors from riskier assets into safe-haven US dollar.

Thursday’s close above Mar 31 former high (93.45) generated strong bullish signal on formation of a double-bottom at 89.15/50 (Jan 16/May 25).

The index is on track for a weekly gains of around 1.3% (the biggest weekly advance since early June) with weekly close above 93.45 to confirm bullish signal and open way for extension towards 94.30 (Nov 4 high) and more significant obstacles at 94.66 (200DMA) and 94.75 (Fibo 38.2% of 103.80/89.15/Sep 25 high).

Overbought daily studies warn that bulls may lose traction and enter consolidation/correction before resuming.

Initial support at 93.00 zone (rising 10DMA) should keep the downside protected and guard pivotal supports at 93.45 (Aug 13/16 trough), loss of which would sideline bulls.

Res: 94.00; 94.30; 94.75; 95.00.
Sup: 93.45; 93.00; 92.45; 92.16.