On Thursday, the US dollar regained momentum, bouncing from a five-week low after repeatedly testing and holding above the pivotal Fibonacci support level at 101.13. This level, which marks the 38.2% retracement of the range between $98.55 and $102.72, saw multiple failed breakdown attempts, ultimately forming a bear trap and generating an initial bullish signal.
Near-term sentiment improved following the impact of the US midterm elections on the greenback, though further upside progress is needed to mitigate existing downside risks.
To sustain the recovery, the index must fill Wednesday’s gap and surpass the converged 10-day and 20-day moving averages at 101.72 and 101.76, respectively. A confirmed breakout above these levels would shift the near-term focus to further upside potential.
A positive development is also emerging from the false break below the recent range floor, with a sustained close above 101.25 required to validate the signal.
In an alternative scenario, a firm break below the 101.13 Fibonacci support could trigger a deeper decline, exposing key support levels at 100.64 (50% retracement, reinforced by the 55-day moving average), 100.53 (100-day moving average), and the psychological zone around 100.14 to 100.00 (61.8% Fibonacci retracement).
Res: 101.70; 101.95; 102.30; 102.72
Sup: 101.13; 101.00; 100.64; 100.14
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