The US dollar index has managed to push through 106.00 after carving an interim low around 104.95 early this week. The index is seen to be trading close to the 106.05 mark at this point in writing as the bulls prepare to come back in control soon. Please be aware that prices could drop first to 104.20 before reversing higher again.
The US dollar index might have completed its corrective decline from 114.67 towards 104.95 or it is extremely close to terminating its correction. Please note that the Fibonacci 0.618 extensions have been met around 106.95 during a sell-off last week. Ideally, a corrective rally should be produced towards 110.60 before resuming lower again.
Only a break above 112.67 will confirm a potential bullish trend reversal and will open the door to print fresh highs above 114.67. On the flip side, please keep a watch on the 104.95 interim support as a break there will drag prices towards the 104.00-20 zone before resuming higher again. To sum up, prices are about to produce a rally either from here or after printing a shallow low below 104.90.
Trading idea:Potential rally against 103.50
Good luck!