Technical outlook:
The US dollar index has already rallied more than half way through 96.30 levels at this point in writing. It is in line with our projections that prices could reach up to 96.50-60 zone going forward. There is still some room left for bulls to push through before finding resistance again. Ideally prices will remain well capped below the 97.37 mark.
The US dollar index rallied through 97.37 levels around January end and reversed lower carving an Evening Star candlestick pattern. Prices dropped through 95.00 levels carving a meaningful bearish boundary over the next few days. At the moment, bulls are retracing the drop and could push prices through 96.50 mark before finding recistance.
Also note that 96.50 is the Fibonacci 0.618 retracement of the earlier drop, hence resistance would be strong if prices reach there. High probability remains for a bearish reversal thereafter and drag prices lower toward 93.50 and 91.30 levels respectively. Watch out for bears coming back in control close to 95.50-60 mark.
Trading plan:
Potential drop to 93.50 and 91.30 against 98.00 levels
Good luck!
