Technical outlook:
The US dollar index rose through 101.98 on Tuesday after carving an interim low around 101.10 early this week. The index might be on its way higher towards 102.50 and up to 103.40 in the near term. Bulls will be poised to hold prices above the 101.08 mark to keep the short-term structure intact.
The US dollar index seems to have carved a lower degree downswing between 104.88 and 101.08 since mid-May 2022. Furthermore, bears have taken out initial support at 102.30 with relative ease. Ideally, the index should produce a counter-trend rally towards 102.50 at least in the next few trading sessions.
The US dollar index is now working upon a larger degree upswing between 89.50 and 104.88 levels. The index is unfolding into a similar degree corrective drop, which has potential towards 98.70 and up to 95.00 levels going forward. Also, note that 95.00 is close to the Fibonacci 0.618 retracement of the above rally. A high probability remains for a bullish bounce thereafter.
Trading plan:
Potential short-term rally through 103.40, then lower towards 98.70 and 95.00
Good luck!
