Technical outlook:
The US dollar index rallied through the 104.33 high on Friday before turning sharply lower. The index is seen to be trading close to 103.60 at this point in writing as the bears are looking poised to remain in control. Potential remains for prices to drop towards 102.00 in the near term, before turning higher through 106.50 going forward.
The US dollar index is working on a larger-degree corrective rally from the 100.50 low which was printed on February 02, 2023. The rally between 100.50 and 104.33 could be the first wave within the correction, which has the potential to push through 106.50 and 109.50 respectively. If the above structure holds well, prices could decline towards 102.00 as the second wave unfolds.
As projected on the 4H chart here, the US dollar index is facing immediate resistance at 105.35 while support is seen around 102.00 respectively. A push above 105.35 will be constructive for the bulls and further open the door towards 109.50. Besides, note that 109.00-50 is passing close to the Fibonacci 0.618 retracement of the entire drop between 114.70 and 100.50.
Trading idea:
Potential bullish rally against 100.50
Good luck!
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