Technical outlook:
The US dollar index rose to 104.30 during the Asian session on Wednesday. The index dropped to 103.70 on Tuesday before finding some support. Intraday resistance is seen at around 104.30-50 zone as bears prepare to come back ahead of 104.86. Prices should ideally stay below 105.52 to keep the bearish structure intact.
The US dollar index seems to produce a complex corrective structure (potential expanded flat), which is into its last leg lower towards 99.00 in the medium term. If the proposed structure unfolds accordingly, prices would stay below 105.52 and reverse sharply lower from here. Interim support is seen around 101.08 and a break will accelerate.
The US dollar index is still working on its larger degree upswing between 89.50 and 105.52. Please note that the Fibonacci 0.382 retracement of the above upswing is seen through 99.00, which is the potential support zone. Traders might be preparing to initiate fresh short positions around current levels and drag the price towards 99.00 in the next few trading sessions.
Trading plan:
Potential drop to 99.00 against 106.00
Good luck!
