Technical outlook:
The US dollar index reversed sharply from 89.50 levels yesterday, which is also Fibonacci 0.50 support levels of the recent rally from 88.25 to 90.90. It looks like the index has completed its corrective drop yesterday and has reversed higher to produce higher highs and higher lows from here on. The wave count also suggests that waves 1 and 2 might have already terminated and wave 3 could be under way, which could push prices significantly above 90.90 levels. Alternatively, it is possible that wave 2 of the same degree takes a more complex structure and terminates much lower towards 88.80/89.00 levels before wave 3 could resume. In either case, the US dollar index is slated to push higher at least through 94.00/95.00 handle. Besides, a conventional inverted Head and Shoulder price pattern is also seen to be unfolding and if it holds true then ideally prices should stay above 88.25 levels going forward.
Trading plan:
Please remain long and also look to buy more at lower levels if prices reach them. Risk remains at 88.20.
Fundamental outlook:
Watch out for Canada's unemployment rate at 08:30 AM EST, followed by the US Unemployment rate and NFP.
Good luck!
