In our analysis on the Dollar index over the last few weeks, we were clear that while the index is around or close to the 99-100, we prefer to be neutral if not bearish. We consider the upside potential to be limited. Today's price action did not come by surprise to us. We continue to feel that it is more probable for prices to continue lower.
The Dollar index continues to trade inside the bullish channel since the 2021 low. Price is making new weekly lows relative to last week. Price tested the 99 level once again yesterday and got rejected. With the index trading close to the upper channel boundary, we continue to prefer to be neutral if not bearish. The Dollar index has the potential to move lower towards the lower channel boundary towards 96. Technically trend remains bullish as price continues to trade inside the bullish channel. Nevertheless, downside potential is bigger and that is why we avoid remaining bullish at current levels.
