Technical outlook:
The US dollar index has been drifting sideways testing its trend line support of one year just ahead od 95.10 levels. The index is trading close to 95.50 mark at this point in writing and could produce a meaningful pullback through 96.50 before resuming lower again. Bears remain inclined to stay in control as long as prices hold below 97.40 mark.
The US dollar index has carved a meaningful downswing between 97.30-40 and 95.10 levels over the last week. It remained shy of breaking below the trend line support and subsequently below 94.50-60 initial price support on the daily chart. Nevertheless, the near term structure might be bullish through 96.50 but overall structure is bearish against 97.37 highs.
High probability remains for a drop through 93.00 and lower in the medium term. The larger degree wave structure is also indicating that bears are back in control since 97.30-40 mark, which is the Fibonacci 0.618 retracement of the earlier drop between 104.00 and 89.00 levels respectively. Watch out for a sharp decline towards 93.00 and lower in the medium term.
Trading plan:
Potential rally to 96.50 and then lower toward 93.00 against 98.00
Good luck!
