The dollar index edged higher in early Monday after last weekâs pullback from three-month high (104.85) was repeatedly rejected just above 100DMA (103.96), generating initial signal that correction might be over.
The dollar continues to benefit from signals that sticky inflation may delay widely expected Fed rate cuts, with focus on FOMC minutes (due on Wednesday).
The greenback will receive fresh boost if the minutes maintain hawkish tone and point to decision to keep interest rates on hold in March.
Fresh bulls look for renewed attack at Fibo level at 104.42 (61.8% of 106.96/100.29), break of which to neutralize negative signal from bull-trap pattern formed on weekly chart and expose next target at 105.39 (Fibo 76.4%).
Technical picture on daily chart is also supportive as momentum remains positive and MAâs are predominantly in bullish configuration, with bullish near-term bias while the price stays above 100DMA.
Caution on violation of 100DMA which would risk test of lower pivots at 103.78 (20DMA (Fibo 23.6% of 100.29/104.85) and 103.48 (200DMA).
Res: 104.42; 104.56; 104.85; 105.39
Sup: 103.96; 103.78; 103.48; 103.11
