Technical outlook:
The US dollar index rallied through the 105.45-50 levels on Wednesday before finding resistance and pulling back. The index is seen to be trading close to 104.85 at this point in writing as the bulls prepare to come back in control ahead of 103.70. A high probability remains for a bullish turn between 104.40 and 104.60 levels. The price is looking higher from here with 103.70 intact.
The US dollar index is facing resistance at 107.00 followed by 107.70 and higher; while immediate support comes in around 103.70. A push above 105.50 will confirm and accelerate the climb through 107.00 and higher, which seems a high probability now. Intraday support comes in between 104.40 and 104.60 levels as the bulls remain inclined to hold prices above 103.70.
The wave structure between 114.70 and 103.70 has unfolded in three waves, hence it is corrective. If the above holds well, the next wave should be unfolding higher towards 114.70 and beyond. On the flip side, even if lower levels are expected, the index should produce a corrective rally at least towards the 110.00-50 zone. The instrument is set to trade higher over the next several trading sessions.
Trading idea:
Potential bullish reversal against 103.00
Good luck!
