Early on Wednesday, dollar bulls are on the defensive as sellers put pressure on the US dollar. The US dollar index is right on the top of the channel support but a bigger downward correction is justified by the daily stochastics towards at least 97.50.
Red lines - bearish divergence
As per our analysis of the bearish divergence signal that was given when prices were at 99.90, the US dollar index made a pullback as expected and has reached support area at 99.30, while the stochastics in the 4-hour chart have moved towards the overbought levels. The price is now testing the channel and cloud support. Breaking below 99 will open the way to 97.50.