The US dollar index got rejected at the 38% Fibonacci retracement resistance as we had expected pulling back down towards last week's lows. I expect dollar bulls to give a strong fight and not surrender as the support at 97.50 is very strong.

The US dollar index price is below the Ichimoku cloud heading lower towards the recent lows after the rejection at the 38% Fibonacci retracement. Support is found at 97.50 and resistance is seen at 98.70. Breaking above resistance could push the price towards 99-99.20. Breaking below support will push the index towards at least 97.20.

The weekly chart continues to be overbought and, despite a sharp decline, the stochastic oscillator has not fallen much. I believe more downside should be expected in the US dollar index over the next few weeks, but any prediction now is very dangerous considering the approaching FOMC meeting and the rate hike which is on the cards. Traders should be very cautious no matter how volatility is going to spike next week.