The US dollar index rallied through 107.05 intraday on Monday as we had predicted last week. The index is seen to be trading close to 106.95 at this point in writing as the bears prepare to come back in control. It might be safe to exit long positions taken last week as 106.95-107-05 could be a potential resistance zone.
The US dollar index is facing the Fibonacci 0.382 resistance of the recent downswing between 110.60 and 104.90. Also, the immediate resistance trend line is passing through the 107.05-10 zone. A probability remains high for a bearish turn from here and a drop towards 104.30 in the next few trading sessions. A break above 110.60 would void the bearish outlook.
The US dollar index is facing immediate resistance around 110.60, followed by 112.67; while support comes in around 104.30 as marked on the 4H timeframe. If the bears are successful in taking control back from here, they would target 104.00 next. On the flip side, a push towards 109.00 will bring the bulls back in control.
Trading idea:Potential drop towards 104.00 against 109.00
Good luck!