Technical outlook:
The US dollar index rallied through the 101.80 highs on Wednesday before facing resistance. The index might be preparing to complete its counter-trend drop towards 100.90 in the near term before resuming higher again. It is currently seen to be trading close to 101.50 as the bears prepare to drag the price lower towards 101.00 at least, to complete the corrective pattern.
The US dollar index is structurally unfolding a down gartley, which would be complete around 105.50 at least. Potential remains for the structure to rally up to 106.50 and later on to 109.30. Also, note that 109.30 is the Fibonacci 0.618 retracement of the earlier drop between 114.70 and 100.50 levels respectively. Hence, the probability of a bearish reaction remains high.
The US dollar index has been working on its recent upswing between 100.34 and 101.80 as seen on the 4H chart. It is retracing lower towards 100.90 which is also the Fibonacci 0.618 retracement of the above rally. Watch out for a bullish reaction if prices manage to drop there as the bulls prepare to come back in control.
Trading idea:
A potential rally against 100.00
Good luck!
