The greenback dropped to the critical support area of 104.00 - 104.50, where July and September lows are located. This is the last line of defense for bulls, and if the dollar drops below this level, large stop-losses will be hit.
In that case, the medium-term trend would most likely change to bearish, targeting the psychological level of 100.00.
Alternatively, if the pair defends this support zone, there is a potential of a triple-bottom pattern. That is usually a strong bullish formation, which often prompts a larger rally.
The first resistance could be in the 105.20 area, and the greenback needs to rise above this zone for the short-term trend to become bullish. The major resistance now stands
at October' highs of 106.00.
