Technical outlook:
The US dollar index is pulling back after having produced a Doji candlestick pattern last Friday since 100.12 highs. The index is seen to be trading close to 99.90 levels at this point in writing and is expected to reverse towards 97.70 levels soon. Bears need to hold prices below 100.12 interim resistance, to keep the structure intact.
The US dollar index has print two fresh swing highs over the last week (99.77 and 100.12 levels) before pulling back. It is interesting to note that each swing high was accompanied by a strong bearish divergence on the RSI (not shown here). The above phenomenon is potential indication of a trend reveral ahead.
Furthermore, it should also worth noting that its counterpart currency EURUSD has refrained from printing fresh swing lows below 1.0800, over the same period. This divergence phenomenon could also be an indication of potential reversal ahead. A break below 99.50 will confirm that a meaningful top is in place in the US dollar index.
Trading plan:
Potential drop from toward 97.70 against 100.50.
Good luck!
