Technical outlook:
The US dollar index rallied through fresh swing high around 100.10 levels on Friday before pulling back. The index produced a Doji on the daily chart and is now seen to be trading just below 99.80 level. Bears could be preparing to carve a bearish candlestick pattern and come back in control. A close below 99.30 will certainly confirm a reversal ahead.
The US dollar index has yet again rallied through fresh swing high towards 100.10 mark accompanied by a strong bearish divergence on RSI on multiple timeframes. It is not shown on the chart today but it could be taken as a potential turn in the trend going forward. If the above structure unfolds lower from here, the first potential target could be 97.70.
A break below 97.70 would also confirm that trend has reversed and that bears are back in control. It could be too early to confirm a turn from here but traders might prepare to initiate after the bearish signal is confirmed. Also note that the index will face resistance here since it is close to the Fibonacci 0.618 retracement of the larger degree downswing between 104.00 and 89.20.
Trading plan:
Preparing for a potential drop from here.
Good luck!
