Technical outlook:
The US dollar index dropped through fresh lows at 101.36 in the early hours of trade on Monday. The index is seen to be trading close to 101.55 at this point of writing as the bulls prepare to come back in control soon. A break above the 102.25 short-term resistance will be the first sign of the bulls coming back in control and that a bottom is in place at 101.36.
The US dollar index seems to have now completed its larger-degree drop, which had begun from the 114.70 high. If the above structure holds well, prices would push higher producing a bullish reversal signal. A potential Engulfing Bullish candlestick pattern is unfolding on the 4H chart presented here. Further, RSI is also producing bullish divergences on several timeframes (not shown here).
The US dollar index is now facing strong resistance at 105.35 as marked on the 4H chart here. A push higher will further add confidence to the bullish outlook and that a bottom is in place at 101.36. Potential remains for a push towards 106.40 and 109.50 levels in the next several trading sessions.
Trading idea:
Potential rally against 100.50.
Good luck!
Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
