•    USDX stuck in range defined by 38.2% and 50.0% Fibos

•    Hovers around the 50-day SMA, which shifted from resistance to support

•    Momentum indicators are gaining ground

The US dollar index (December Futures) has formed a neutral short-term structure, fluctuating between the 50.0% and 38.2% Fibonacci retracements of the 114.71-99.19 downleg. Although the bears managed to push the price below the lower boundary of the range, the index quickly worked its way back.

If the price extends its recent rebound above the 50-day simple moving average (SMA), there is no prominent resistance level until the 50.0% Fibo of 106.95. Jumping above that region, the dollar index could then test the 61.8% Fibo of 108.78. Even higher, the 78.6% Fibo of 111.39 may curb further upside moves.

Alternatively, should the price reverse back lower, the 38.2% Fibo of 105.12 could act as the first line of defence. Further declines could then cease at the recent support of 104.65. Dipping below that level, the index could descend towards the 23.6% Fibo of 102.85.

In brief, despite its temporary drop below the tight range, the dollar index seems unable to escape the short-term sideways pattern in either directions. Hence, it is most likely that the consolidation phase will resume until fresh catalysts emerge.