Credit: REUTERS/GARY CAMERONAug 27 (Reuters) - The dollar index recovered from a six-session low after fiscal support hopes turned back the fall driven by the Fed's policy shift, but it has a lot of work to do to transform its oversold bounce into a squeeze of the near-record net-speculative IMM short position.
House Speaker Nancy Pelosi's comment on pandemic relief talks already deflated some fiscal hopes .
Though weekly dollar index RSIs remain deeply oversold at 25, arguing for a recovery or more consolidation, the bearish price pattern of eight consecutively lower weekly highs will remain intact unless last week's 93.48 high is breached before week's end.
Thursday's 92.42 low found support by the tight lower 21-day Bolli band that also caught last week's trend lows. Recently oversold and bullishly diverging daily RSIs have risen to more neutral levels and prices remain below the 30-day moving average that capped rebound attempts since late May, last at 93.56.
The downtrend remains intact without a daily trading range above the 30-DMA and a close above last week's 93.48 high on Friday. If the dollar musters that, resistance by 94.30 could be targeted next.
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(Randolph Donney is a Reuters market analyst. The views expressed are his own.)
((randolph.donney@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
