Technical outlook:
The US dollar index dropped through the 103.12 lows on Monday before finding support. The index tested its recent swing low but did not break below 103.07, holding the bullish structure intact. It is seen to be trading close to 103.25 at this point in writing as the bulls remain poised to resume higher towards 105.50 and 107.00 levels respectively in the near term.
The US dollar index seems to have also completed its larger-degree downswing, which began from the 114.70 highs earlier. The corrective wave might have terminated just ahead of 103.00 as the bulls are now looking to come back in control. A push above 104.50 will confirm that a higher low is in place at 103.12 and that prices are looking higher from here.
The US dollar index might be looking to resume its larger-degree upswing and push beyond the 114.70 highs in the next few weeks. Alternatively, if the drop from 114.70 is still incomplete, prices could pull back and find resistance around 107.00 and 110.00-50. The bears might come back in control thereafter and drag prices below 103.00. Either way, we expect a pullback rally at least in the near term.
Trading idea:
A potential rally against 103.00
Good luck!
Relevance up to 04:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
