According to the US Dollar Index, the US dollar ended last week at session lows, erasing approximately -1.0% and snapping a four-week winning streak.
Although the monthly chart exhibits a long-term uptrend, immediate space demonstrates limited support or resistance. Consequently, the break of the 50-day simple moving average (SMA) at 105.12 and daily support at 105.04 (now marked resistance) takes precedence. Importantly, clearing bids from this region swings the technical pendulum in favour of bears, targeting the 200-day SMA at 104.49, closely shadowed by support coming in at 104.09.
The shorter-term flow on the H1 chart also demonstrates the scope of exploring deeper levels following the rejection of resistance from 105.13, a level aided by the upper boundary of a short-term falling wedge, drawn from the high of 106.04. The next downside support target on the H1 can be seen at 104.73, while a breach of this level exposes H1 support from 104.37 which shares space with the 200-day SMA.
Bears targeting support?
Given the lack of daily support from 105ish and the technical evidence supporting lower levels on the daily and H1 charts this week, sellers could remain in the driving seat, targeting H1 supports at 104.73 and 104.37.
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