FX.co ★ Trading plan for US dollar index for March 08, 2022

Technical outlook:

The US dollar ndex has rallied through 99.50-60 zone on Monday as USD strengthened across major currencies. The index is expected to face resistance here and a bearish reversal can be expected soon. If prices continue to push higher from here, the next potential target is 101.00 mark, which is next in-line resistance.

The US dollar index has managed to reach fibonacci 0.618 retracement of the entire drop between 104.00 and 89.20 as presented on the daily chart here. High probability remains for a bearish turn from current levels as bears prepare to be back in control. The index is seen to be trading close to 99.35 mark at this point in writing and a close below 98.50 today will produce an engulfing bearish candlestick pattern.

If correct, prices will reverse sharply lower from here and drag towards 95.00 initial support in the near term. IT would confirm that bears are back in control and are here to stay for long. Please also note that a break below the trend line support will be encouraging to bears as they drag prices through the 89.20 mark going forward.

Trading plan:

Potential drop through 95.00 against 100.00

Good luck!