SINGAPORE: The dollar index may stabilize in a support zone of 102.16-103.32 next quarter, and rise into a range of 106.08-107.97.
A projection analysis on the uptrend from 72.70 still marks effective supports. The 161.8% level of 103.32 seems to be one of them.
This support is not working alone. It is strengthened by a similar one established by the upper trendline of a wedge.
The 50% retracement of the uptrend from 89.54 to 114.78 also reveals a key support of 102.16, the 50% level. Once touched, these supports will be activated to stop the fall and trigger a decent bounce.
A break below 102.16 could confirm the extension of the downtrend towards 99.18.
On the daily chart, the fall looks exhausted, as suggested by the bullish divergence on the MACD. The trend may be disrupted by the first wave of bounce.
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A falling channel indicates a bounce target of 105.283.
The index is expected to resume its downtrend to complete a wave C around 102.662. A much stronger rally would follow thereafter.
A break above 105.283 could lead to a gain to 106.668-107.905 range.
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