USD Index, AUD/USD Hint at Near Term ReversalsUS Dollar Index® FuturesICEUS_DLY:DX1!CityIndexAs outlined in last week’s video, I suspect the US dollar may have the potential to break higher as part of its wave C before momentum realigns with its dominant bearish trend. However, Monday’s shooting star candle just below 100, coupled with an overbought RSI (2), warns of a potential pullback ahead of any breakout. Also note that AUD/USD has formed a spinning top doji near the September low, suggesting that bearish momentum is waning despite closing lower for a fourth consecutive day. With the RBA likely to deliver a hawkish tone when they hold rates today, there’s potential for a short-term bounce in the Australian dollar. However, if I’m right in expecting an eventual bullish breakout in the US dollar index, I’ll also be watching for evidence of a swing high on AUD/USD once that anticipated bounce is delivered. Matt Simpson, Market Analyst at City Index