The dollar index is contracting in a triangle formation as the index hit levels never seen since 2002. The unstoppable surge of the dollar is losing momentum, at least for the short term. Below parity EURUSD and USDJPY’s major resistance of 150 is playing a key role. With the start of the ECB’s rate hike cycle while FED is nearing the plan peak rate a consolidation period might be possible if the 10-year yield does not break the markets.
For today, 112.75 is the main support to follow. A possible break to the downside might lead the index to 112.20 for the remainder of the week. A triangle break is not expected for the moment unless big shock news or economic data comes in.
For upside moves, 113.30 and 113.55 can be followed as resistances. A big surge of treasury yields over the %4.25 might trigger the bullish case.
