Technical outlook:
The US dollar index rose to a high of 105.43 on Tuesday before pulling back. The daily chart has produced a Doji (Hanging Man) candlestick pattern, indicating a potential bearish reversal. A break below 104.50 interim support will confirm the first step of a larger degree bearish turn. Bears would target below 101.00 initially.
The US dollar index is seen to be trading around 105.15 at this point in writing and is expected to reverse lower again. The index might be unfolding a complex correction (expanded flat) and if correct, prices will reverse sharply from here to 99.00 and 95.00 respectively. Bears will be inclined to hold prices below 105.50.
The US dollar index is working on a larger degree upswing between 89.50 and 105.43 as seen on the daily chart. Ideally, prices now need to produce a meaningful corrective decline at least to 99.00. Please note that the Fibonacci 0.382 retracement of the above rally is seen through 99.00, which should offer support.
Trading plan:
Potential drop through 99.00 against 106.00
Good luck!
