Technical outlook:
The US dollar index swung both sides on Thursday after the US CPI figures, rallying close to 96 and then reversing lower towards 95.10 levels. The indice is seen to be trading around 95.55 at this point in writing and expected to continue higher through 96.50 before it finds resistance again. Bulls are looking poised to remain in control in the near term as prices hold above the 95.00 mark.
US dollar index has already produced a meaningful downswing between 97.37 and 95.10 levels over the last week. The above drop needs to be retraced before the next bear leg could resume towards 93.00 and further. Please note that 96.50 is also close to the Fibonacci 0.618 retracement of the above drop. High probability remains for a turn lower from there.
In the immediate short term, we can expect a rally toward 96.50-60 mark to complete the corrective Gartley Structure. The US dollar index could then turn lower and break the one year old trend line support along with price support around 94.50-60 levels as marked on the daily chart. The overall structure looks bearish against 98.00.
Trading plan:
Potential short term rally towards 96.50 then reversal lower towards 93.00 against 98.00
Good luck!
