Technical outlook:
The US dollar index continues to trade within a tight range between 103.80 and 104.40. The index is seen to be trading at around 103.75 at this point in writing and is preparing to break lower soon. Bears will be inclined to hold prices above the 105.50 interim resistance to keep the near-term structure intact.
The US dollar index is targeting below 99.00 in the next few trading sessions before resuming higher again. Also, note that the Fibonacci 0.382 retracement of the earlier upswing between 89.50 and 105.52 is passing close to 99.00. The high probability remains for a bullish turn if prices manage to reach there.
The US dollar index is waiting for a break below 103.70 in a consistent way to confirm further acceleration lower. Bears are now aiming to break below 101.08 to confirm that a potential top is in place and prices would drag lower towards 99.00 at least. Traders might be preparing to add more short positions on a break below 103.70.
Trading plan:
Potential drop through 99.00 levels against 106.00
Good luck!
