The US dollar index made a small pullback yesterday to just below 99 and held above short-term support of 98.80. The initial rejection in the area of 99.35 came as we expected. But I continue to expect a deeper correction and not a break above 100.

Blue line - support trend line

The US dollar index is holding above both the Ichimoku cloud and the blue support trend line. A trend remains bullish but I believe we should expect a reversal and a break below the cloud and the trend line. This will give a sell signal with a high probability of reaching 97 and lower.

In the daily chart, the price remains above the Ichimoku cloud. Support is seen at 98.80. A daily close below that level will be a bearish signal. Next support is seen at the kijun-sen (yellow indicator) at 98.40. The structure of an upward move in the US dollar index is choppy and overlapping since early December. I believe that one more leg down should be expected similar to the decline from 100.50 to 97.20.