Technical outlook:
The US dollar index had raised through yet another swing highs around the 99.81 mark during the early Asian session on Friday. The index is seen to be easing a bit as it trades close to 99.75 at this point in writing. We can expect prices to reverse lower from here and drag towards 97.70 at least, which is initial support.
The US dollar index has printed yet another swing high accompanied by a strong bearish divergence on the daily RSI (which is not present today on the chart view). It might be an indication of a potential trend reversal against the 99.81 high registered on Friday. A high probability remains for a sharp decline from current levels as bears remain poised to be back in control.
Also note that the entire rally since 89.20 lows has been a corrective wave, which has unfolded into three waves until 99.81 levels. The above rally has retraced the previous swing drop between 104.00 and 89.20 by pushing through the Fibonacci 0.618 levels above the 98.50 mark. A break below 97.70 initial support will confirm that bears are back in control.
Trading plan:
Potential drop to 97.79 against 100.00
Good luck!
