Technical outlook and chart setups:
The US Dollar Index has re-tested yesterday's highs at 98.84 level before dropping lower again. The index is trading at 98.74 for now, looking to drop lower further towards 97.60 and 97.40 levels at least as displayed here. Please also note that 97.60 is immediate support while 97.40 is the fibonacci 0.382 support of the rally between 95.05 and 98.85 levels, as depicted here (wave iii). The wave structure indicates that the index has completed a 5-wave rally of a lesser degree from 95.05 level. It is now expected to drop lower in a corrective manner (3 waves) towards at least 97.40 level. It is hence recommended to exit long positions and remain flat for now. Aggressive traders might want to go short now with stop at 98.90 targeting 97.40 level. Immediate resistance is at 98.85 level, while support is seen at 97.40 level respectively.
Trading recommendations:
Remain flat for now. Aggressive traders might want to remain short, stop at 98.90, target 97.40
Good luck!
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