Technical outlook and chart setups:
The US Dollar Index dropped towards 97.60 levels yesterday before pulling back. The index is trading at 97.85 levels for now, looking to drop lower further towards 97.00/96.95 levels at least. Please also note that 96.94 is the fibonacci 0.382 support of the rally between 95.00 and 98.20 levels, as depicted here. The wave structure indicates that the index has completed a 5-wave rally from 95.00 level. The current pullback would be considered as a retracement which is expected to terminate at 96.95 levels (wave 4 of a larger degree). Please also note that the channel line support is passing through the same level as depicted here. It is hence recommended to exit long positions and remain flat for now. Aggressive traders might want to go short now, with stop at 98.50 targeting 97.00 levels. Immediate resistance is at 98.13 levels, while support is seen at 96.95 levels respectively.
Trading recommendations:
Remain flat for now. Aggressive traders might want to remain short, stop is at 98.50, a target is at 97.00
Good luck!
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