Technical outlook:
The US dollar index has produced a pullback rally towards 103.80 before finding resistance. The index might have carved a lower high around 103.80 and could be preparing for a drag lower towards 102.30 in the near term. Bears might be inclined to hold prices below 104.88 and drag lower towards 102.30, 99.65 and beyond.
The US dollar index remains well supported around the 102.30 mark, followed by 99.65, 97.65 and lower; while interim resistance is seen through 105.00 respectively. If a major top is in place around 104.88, the index would turn lower again and break below 102.30 in the near term. The potential remains to drop towards the 98.90 levels going forward.
The US dollar index prices action has acted according to the bearish divergence on daily RSI as discussed earlier. The potential trend might have already reversed against 104.88 and a break below 102.30 will confirm. The downside target remains through 99.00 and 95.20 over the next several months.
Trading plan:
Potential drop through 102.30 and 99.65 near term, against 105.00
Good luck!
