Technical outlook:
The US Dollar Index has unfolded into an impulse wave from 88.30 lows as depicted on the daily chart here. The most probable formation after an impulse should be a 3-wave corrective drop in the form of a flat or expanded flat or a combination. Looking at the structure till now, the drop from 97 through 94 unfolded into 3 waves; hence we have labeled as (A). A subsequent rally from 94.00 through current price at 96.76 has also unfolded into 3 waves, hence labeled as wave (B) on the chart here. If prices remain below 97.00 levels going forward, a standard flat can unfold into wave (C) lower towards 93.00 levels at least. Only a push ahead of 97.00 could be an obstacle for bears.
Trading recommendations:
Aggressive traders go short now against 97.10 while conservative traders stay aside for further confirmation.
Good luck!
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