Technical outlook:
The US dollar index raised through 101.50 mark during late Asia Session on Monday. The index has carved yet another swing high amidst bearish divergence on the daily RSI (shown here). It indicates a potential trend reversal from here and bottom line remains that prices should stay below 101.50 mark going forward.
The US dollar index has just pushed above the Fibonacci 0.786 retracement of its previous downswing between 104.00 and 89.00 (blue horizontal line). High probability remains for a bearish reversal from here as bears remain poised to be back in control. Initial support is seen around 99.60 and a break lower will confirm that bears are back in control.
The US dollar index is seen to be trading around 101.45 mark and could push through fresh highs. Only a break below 99.60 will be considered as the first sign of a larger reversal and open the door to drop through 97.70, which is next in-line resistance. Traders might be willing to step aside and wait for a bearish signal before initiating fresh short positions.
Trading plan:
Preparing for a potential bearish reversal.
Good luck!
