Technical outlook:
The US dollar index has remained within a 100-point range between 105.80 and 106.80 levels in the past trading session. A bit of sideways action could be expected after prices dropped to 105.86 on Friday. A star Doji candlestick pattern was carved on the daily chart indicating a potential bullish price reversal ahead. A Morning Star could be completed today to confirm the same. The instrument is looking higher against the 105.86 mark.
The US dollar index might have terminated its larger-degree corrective wave, which began from 114.67 earlier. The wave structure looks corrective between 114.67 and 105.86 levels, indicating at least a pullback rally if not a trend reversal. Potential targets for a pullback are pointing towards the 110.50-60 mark, going forward.
The recent downswing, which could be worked upon is between 112.65 and 105.86 levels in the next few trading sessions. If prices manage to turn lower from 110.50, the drop could continue towards the next potential support seen around 104.30. Only a break above 112.65 will confirm that the larger-degree uptrend has resumed.
Trading idea:
Potential rally against 105.80.
Good luck!
