Technical outlook:

The US dollar index has dropped through 104.30 intraday on Thursday. The index is trading around the day's low at this point of writing after rallying through the 105.24 mark during the early Asian session. Bears seem to be poised to hold prices below the 105.52 mark to keep the immediate downside momentum intact.

The US dollar index is working to produce a complex corrective drop since hitting the high of 104.88. The intermediate support is now seen around the 101.08 level and a break lower will accelerate the fall to the 99.00 level going forward. On the flip side, a break above 105.52 would initiate a test of the 106.00 mark before turning lower again.

The US dollar index has already carved a larger degree upswing between 89.50 and 104.88 as seen on the chart here. Ideally, a corrective wave should be underway towards the 99.00 mark, which is also the Fibonacci 0.382 retracement of the above boundary. Traders will be poised to initiate fresh short positions around the current levels against 105.50-60,

Trading plan:

Potential drop through 99.00 against 106.00

Good luck!