Technical outlook and chart setups:
The US Dollar Index has finally dropped lower as expected and discussed earlier and begun its counter trend printing interim lows at 98.16 levels today. The index is trading at 98.20 for now, looking to drop lower further towards 97.85 and subsequently towards 97.60 level as depicted here. Besides the fibonacci extensions are pointing towards 97.85 level in line with expectations. Please also note that 97.60 is immediate support as well as the termination point of previous wave 4 (swing lows). The wave structure indicates that the index has already completed a 5-wave rally from 95.05. Now it is expected to drop lower in a corrective manner (3 waves) towards at least 97.60. It is hence recommended to remain flat for now. Aggressive traders might want to remain short now, with stop at 99.00 targeting 97.60. Immediate resistance is at 98.70 level, while support is seen at 97.60 level respectively.
Trading recommendations:
Remain flat for now. Aggressive traders, please remain short, stop is at 99.30, target is 97.60
Good luck!
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