The Dollar index has formed a lower high at 96.27 relative to the January high of 97.41. Price is vulnerable to a new sell off as long as price is below 96.30. The Dollar index is again under pressure and our downside target is at 94.70-94.50.
As long as the Dollar index is trading below the red rectangle resistance area, our short-term view will be bearish favoring another sell off towards 94.70. Support is found at 95.66 and a break below this level will increase chances of our 94.70 scenario coming true. The last higher high in the Dollar index was accompanied by a lower high in the RSI. This was our first bearish divergence. This does not necessarily mean a top, but it should not be ignored if combined with the break of key support levels.
