Technical outlook:
The US dollar index had rallied through 96.30 mark on Tuesday before finding resistance. The index has pulled back since then and is seen to be trading around 95.90 levels at the time of writing. Potential remains for prices to resume lower from here as bears are looking poised to come back in control soon. Watch out for a test of 96.50-60 zone in the near term though.
The index had reached up to fibonacci 0.50 retracement of the recent downswing between 97.37 and 95.00 as presented on the daily chart here. Furthermore, the daily chart has carved an Engulfing Bearish candlestick pattern indicting a potential reversal. A drop below 95.00 mark will accelerate lower toward 93.00 and 91.30 levels.
Also note the the US dollar index is looking bearish at the larger degree wave structure. It has carved a meaningful downswing between 104.00 and 89.20 levels since March 2020. The same was retraced up to the Fibonacci 0.50 mark around 97.37 level. If the structure holds well, bears shall remain inclined to drag prices below 89.20 to complete the structure.
Trading plan:
Potential drop toward 93.00 and 91.30 against 98.00
Good luck!
