The US dollar index has carved a potential lower high around 99.30 levels during early hours on Monday. The index is now seen to be pulling back sharply towards 98.75 as bears remain inclined to be back in control. The daily chart might produce an Engulfing Bearish candlestick pattern confirming a potential reversal ahead.
The index needs to stay below 99.45 mark to keep the bearish structure intact. Earlier, the US dollar index has dropped from 104.00 through 89.20 carving a larger degree downswing. Since then, bulls have managed to produce a counter trend rally pushing prices through the Fibonacci 0.618 retracement of the above drop around 99.45 mark.
An Evening Star bearish reversal signal has appeared on the daily chart in the past week. The recent down swing was between 99.45 and 97.93 levels, which has been retraced up to 99.30 levels. If the above structure holds well, prices should stay below 99.45 and turn sharply lower towards 94.50 from here.
Trading plan:Potential drop through 95.00 against 100.00
Good luck!