Technical outlook:
The US dollar index dropped through the 103.15 level before finding some support. The index is pulling back at the moment and trading close to the 104.00 mark. It seems like a meaningful top is now in place around 105.50 as the index confirms the bearish Evening Star reversal on the daily chart. Bears will be poised to hold prices below 105.52 to keep the momentum intact.
The US dollar might produce intraday pullback rallies but prices should stay below 105.52 going forward. The structure is still depicting a bearish picture with a potential target towards 99.00 and up to 95.00 levels going forward. Intraday resistance might be seen between 104.00 and 104.50 as bears remain in control now.
The US dollar index has indeed carved a meaningful rally between the levels of 89.50 and 105.50, which now needs to be corrected/retraced before the next leg higher could possibly resume. Also note that the 99.00 mark is the 0.382 Fibonacci retracement of the above rally and hence, a high probability remains for a bullish bounce if prices reach there.
Trading plan:
Potential drop through the 99.00 mark against 106.00
Good luck!
