Technical outlook:
The US dollar index might have carved interim lows at around 103.33 on Monday before finding bids again and pulling higher. The index is seen to be trading at around 103.70 at this point in writing. It is expected to push higher through 104.60 before reversing lower again. Bulls will be poised to hold prices above the 103.18 interim lows to keep the structure intact.
The US dollar index is unfolding its corrective decline as an expanded flat wave structure and is expected to drop through 99.00 going forward. The index has carved a meaningful larger degree upswing between 89.50 and 104.88 as seen on the daily chart presented. Ideally, the above rally should be retraced through 99.00 at least, which is the Fibonacci 0.382 level.
Furthermore, the US dollar index has carved a lower-degree downswing between 105.52 and 103.18. Bulls will be poised to produce a pullback through 104.60 before giving in to bears again. Also, note that 104.60 is the Fibonacci 0.618 retracement of the above downswing. Hence, prices remain vulnerable to a bearish turn.
Trading plan:
Potential drop through 99.00 against 106.00
Good luck!
