Technical outlook:
The US dollar index dropped through the 102.30 intraday lows on Monday before finding some bids coming. The index is seen to be trading close to 102.80 at this point in writing and is expected to continue higher as the bulls prepare to come back in control. Prices have hit a major Fibonacci target at 102.30 as seen on the 4H chart here. The price is looking higher from here.
The US dollar index seems to have completed its drop from 114.70, hitting the Fibonacci 1.618 target at the 102.20-30 zone. The bulls can be expected to come back strong from current levels and continue higher in the next several weeks. Immediate price resistance is seen through 105.35 and a push-through will confirm that bulls are back in control.
The US dollar index is also producing a reasonable bullish divergence on the 4H chart as seen here. This could be a potential sign of a trend reversal, which could produce a meaningful rally towards at least 109.00. Aggressive traders might want to hold long positions from current levels, targeting 105.35 in the next few trading sessions.
Trading idea:
Potential bullish move against 102.00
Good luck!
