The US dollar index is dragging lower towards 98.70 as we move into the early New York Session on Tuesday. Bears are carving a potential bearish Evening Star candlestick pattern on the daily chart and are looking to be back in control after carving a lower high around 99.30 levels early this week. Watch out for a break below 97.75 to accelerate further.
The US dollar index has retraced its larger degree downswing between 104.00 and 89.20 in the last several months. The index has reached its fibonacci 0.618 retracement around 99.45 in the past week before finding resistance and turning lower. If bears are able to hold the above pattern, prices are expected to drag lower toward 91.00 levels going forward.
Immediate price support is seen around 94.50-95.00 zone and a break there will confirm that bears are back in control and here to stay for long. Also note that a drag below 97.00 mark would confirm that a meaningful top is in place around 99.45. On the flip side if prices break above 99.45 mark, it can print yet another shallow high before turning lower again.
Trading plan:Potential drop through 94.00 against 100.00
Good luck!