Technical outlook:

The US dollar index has produced a sharp bullish reversal from the 101.50 lows carved on Thursday last week as projected. The index managed to reach an intraday high at 102.62 on Monday, close to 102.96 printed last week.The bulls are now looking poised to remain in control but prices need to hold above 101.50 for the structure to remain intact.

The US dollar index has resumed its last-wave rally potentially towards 106.50 in the next few trading sessions. The larger-degree corrective wave, which began from 100.50, is now in its final phase higher to complete the structure. Probable upside targets remain close to 106.50 and up to the 108.00-109.00 levels in the next few weeks.

The US dollar index has recently bounced from a strong Fibonacci convergence around 101.50. Please note that 101.50 is the Fibonacci 0.786 retracement of the previous upswing between 100.50 and 105.50 and the extension of its counter-trend drop. As discussed last week, prices have bounced sharply. The instrument is likely to settle at 101.50.

Trading idea:

A potential rally towards 106.00 against 101.50

Good luck!