- Dollar index's recovery from key support zone coupled with bullish price-RSI divergence on the 4-hr chart indicates the bears may have run of steam, thus opening doors for a correction to 107.01 (23.6% of 111.88-105.51).
- However, further gains appear unlikely, given stock markets have turned risk-off and USD bulls need a strong wage growth figures release this Friday.
- Consequently, a recovery to 107.01 could be followed by sideways action.
- Pair dropping to fresh yearly lows cannot be ruled out on Friday/next week if US wage growth numbers disappoint.
