The US dollar index has slipped to yet another low at 95.16 on Thursday inching closer to our initial target projection around 94.50 levels. The index has dropped over 200 points in the past four trading sessions after confirming an Evening Star candlestick pattern as marked on the daily chart here. Also note the bearish divergence on the daily RSI, which added further confidence on the bearish setup.
The index is in control of bears as they are now looking poised to break below initial support at 94.50 mark in the immediate future. Also note that it would break a one year old trend line support as well, indicating further downside. Once the above boundary is in place below 94.50 mark, we can expect a corrective pullback towards 96.60 levels in the next few trading sessions.
The US dollar index remains bearish looking at the larger degree wave structure. Prices had dropped between 104.00 and 89.20 earlier, carving a meaningful downswing. The subsequent rally was corrective and managed to reach close to fibonacci 0.618 retracement of the above boundary, around 97.30-40 mark. Watch out for a break below the 94.50 mark near term.
Trading plan:Potential drop to 94.50 against 98.00 almost achieved.
Good luck!