Dollar index may consolidate in 88.258-91.931 range in second quarter

The dollar index may consolidate in a range of 88.258-91.931 over the next three months before seeking its next direction. The range is formed by the 50 percent and the 38.2 percent Fibonacci retracements of an uptrend from the May 2011 low of 72.696 to the January 2017 high of 103.82. The bounce triggered by the support at 88.258 has lasted a few weeks. It may extend further, as it could somewhat match the former bounce from the September 8, 2017 low of 91.011.
The drop from 103.82 could be broken down into five waves. Even though it is difficult to pinpoint the exact bottom of the fifth wave labelled e, a temporary bottom could be developing around 88.258, as suggested by the bullish divergence on the weekly MACD. A break below 88.258 could open the way towards 84.585. However, this target will only be confirmed when the index slides further below 87.259, the 50 percent retracement of the uptrend from the March 2008 low of 70.698 to 103.82. A break above 91.931 could confirm the reversal of the downtrend.