Technical outlook:
The US dollar index has dropped through 95.70 levels intraday on Monday. Prices are now pulling back and trades around 95.80 at the time of writing. Bears are looking to come back in control but need to push below 95.00 to accelerate and confirm. Potential remains for a push through 96.50-60 zone before prices reverse.
The US dollar index has carved a meaningful bearish boundary between 97.37 and 95.00 levels in the past two weeks. The index is retracing the same and has stalled through the 0.50 retracement level. The Fibonacci 0.618 is seen close to 96.50 and hence probability remains high for a bearish reversal thereafter.
The overall structure for US dollar index continues to remain bearish until prices stay below 97.37 levels. The meaningful drop between 104.00 and 89.20 has been retraced through 97.37 levels and its next move should be lower below 89.20 levels going forward. A potential Head and Shoulder pattern is also being carved, which is bearish towards 91.00 in the near term.
Trading plan:
Potential drop to 93.00 and 91.00 against 98.00
Good luck!
