• Dollar index plunges near 200-day SMA
• Momentum indicators weaken further

The US dollar index slipped towards the strong 200-day simple moving average (SMA) at 103.34 earlier today, raising worries that the downside correction may continue.

The technical picture suggests a bearish bias at the moment as the MACD remains negatively charged below its red trigger line, while the RSI is currently pushing for an extension of the downside move as it has been continuing the negative trend since the peak on September 27. The Ichimoku lines are also confirming the southern movement.

The 200-day SMA, which is a former support level, could play a key role since the price drops lower, then the outlook may turn to bearish. The next immediate barrier is the 102.80 line ahead of the 101.60 mark.

In the positive scenario, where the index jumps higher, traders might pay attention to the 104.70 hurdle. A bounce higher could take a breather where the bearish crossover of the 20- and the 50-day SMAs took place at 105.55. If the bulls successfully claim the latter, they might fight for an uptrend resumption above the wall of 105.90 and the eleven-month peak of 107.00.

All in all, despite the negative mood in the market, if there is a rebound off 200-day SMA, it may leave the door open for an upturn.