In previous posts about the Dollar index we have mentioned the similarities to 2017 when price made a similar bottom around 89-90 and then reversed to the upside to reach 102.
Red lines - bullish divergence
Green lines - Fibonacci retracement
The Dollar index has so far retraced more than 61.8% of the decline from 2019 to 2020. Trend remains bullish as price is making higher highs and higher lows. Similarly to 2017, the rise is followed by bearish divergence which is only a warning and not a reversal signal. Bulls need to remain cautious. For now price is following past price behavior and there is no reason why we should not expect a move to 101 again. The road to 101 was choppy back in 2017-2019 and so we should expect similar price action. In previous posts last week we justified a pull back by the Dollar index towards 96. Concluding this is not a good time to open new long positions in the Dollar index.
