Technical outlook:
The US dollar index dropped to 101.43 intraday on Friday after reversing from 102.53 earlier this week. Please note that prices reversed after testing the Fibonacci 0.382 retracement seen close to 102.50, which is potential resistance. Bulls might be inclined to hold prices above 101.08 to keep the structure intact in the near term.
The US dollar index bears were successful in carving a lower degree downswing between 104.88 and 101.08, breaking below interim support at 102.30. The index is producing a Down Gartley corrective structure since then, and it is expected to terminate around 103.40-50. The bears might be taking a break for now before coming back in control.
The US dollar index overall wave structure is projecting a bearish outlook with potential targets towards 99.00 and 95.00 respectively. The index is expected to produce a short-term rally towards the 103.40-50 zone, before turning lower again. Also note that the Fibonacci 0.618 retracement of the above downswing is passing close to 103.40, which will provide the necessary bearish bounce.
Trading plan:
Potential short-term rally through 103.40, then lower towards 99.00 and 95.00 against 105.00
Good luck!
