Technical outlook:
The US dollar index slipped through the 98.50 mark early hours of trading on Friday. The index is seen to be carving a bearish Evening Star candlestick pattern on the daily chart indicating a potential reversal from here. The bottom line for the bearish outlook to hold is 99.30 and 99.45. Bears must hold prices lower.
The US dollar index has been working on its recent downswing between 99.30 and 97.70. It has bounced off lower from 99.00 levels, which is close to the Fibonacci 0.786 retracement of the above downswing. If correct, prices could drop through 96.00 and 95.00 in the next few trading sessions.
Initial support is seen around 94.50 and a break below that would confirm that bears are back in control and are here to stay for long. Note that the one-year support trend line would also break if prices drop through 94.50 Watch out for a drop below the 97.70 mark for bears to accelerate lower towards 94.50.
Trading plan:
Potential drop to 94.50 against 100.00
Good luck!
