Technical outlook:
The US dollar index carved an Engulfing Bearish candlestick pattern after printing swing highs around 100.91 mark early this week. The pattern is significant since it has appeared on the daily chart along with a bearish divergence on RSI (not shown here). It indicates a potential trend reversal from here dragging prices through 97.60 mark.
The US dollar index is seen to be trading around 100.24 levels at this point in writing and is expected to break below 99.50 interim support. A real there will confirm the first step of a potential turn and that bears are back in control. The next near term target should be below 97.70 mark which is initial support on the daily chart.
The US dollar index has already carved a larger degree downswing between 104.00 and 89.20 levels earlier. Furthermore, it has retraced the entire drop through 100.91 level, which is close to fibonacci 0.786 retracement of the above downswing. High probability remains for a turn lower from here as bears prepare to be back in control.
Trading plan:
Potential drop to 97.60 against 101.50
Good luck!
