USD Index Outlook: Dollar Edges Higher on Fresh Risk Aversion over Brexit Fears, US Stimulus Delay

Technical analysis of Forex market

The dollar regained traction on Friday as rising Brexit worries and signs of further delays of new US fiscal stimulus soured sentiment and prompted traders into safety.

The greenback remains in a downtrend since March and hit the lowest since April 2018 last week, with fresh optimism over fading pandemic in 2021 and growing expectations for a global economic rebound, contributing to bearish acceleration in past three weeks.

Bears may pause on deteriorating fundamentals that spark risk aversion and make the dollar more attractive.

More details will be known late Sunday, the deadline for Brexit negotiators to reach a deal or to stop talks, with no-deal scenario to increase uncertainty and give fresh boost to safe-haven US currency. Fresh near-term bulls require initial positive signal on break above 91.20 zone (tops of the most recent recovery / falling daily Tenkan-sen) to expose pivotal Fibo barrier at 91.49 (38.2% retracement of 93.17/90.45 downleg), break of which would signal correction.

Conversely, failure to clear initial barriers would signal extended consolidation before bears resume.

Res: 91.20; 91.49; 91.62; 92.07
Sup: 90.60; 90.45; 90.00; 89.82