Technical outlook:
The US dollar index dropped to 101.30 on Monday at the time of writing. The index might be preparing to test its recent swing low at 101.27 before finding support again. We can expect a shallow low from here before a meaningful counter-trend rally is underway towards the 103.50-60 zone in the next several days.
The US dollar index remains well supported around 99.65, followed by 97.65 and lower, while resistance is strong around 104.88 respectively. Bears might have already carved a meaningful downswing between 104.88 and 101.27 recently. Ideally, a corrective pullback should be underway soon towards the 103.50 level before turning lower again.
Alternatively, the US dollar index might drag through 99.65 and 97.65 if bears break below 101.20 from here. The index is now working upon the larger degree upswing between 89.50 and 104.88. Bears will be inclined to remain in control as a potential drop could reach 95.00 going forward. Prepare for a pullback rally in the near term towards 103.50 through.
Trading plan:
Potential short-term rally towards 103.50, then lower towards 99.65 against 104.88
Good luck!
