FX.co ★ Trading plan for US dollar index on May 23, 2022

Technical outlook:

The US dollar index has dropped close to the 101.90 mark intraday on Monday. The index has behaved in line with our projections, breaking below the 102.30 initial support. Bears have now asserted themselves confirming a potential top in place at 104.88. Prices are now expected to stay below 104.88 and proceed toward 99.00 in the near term.

The US dollar index has carved a religious uptrend between 89.20 and 104.88, from where the price should retrace now. The Fibonacci 0.382 retracement is now seen at 99.00 and bears will be inclined to target that in the next few days. The potential remains for a drop until 95.75, which is the Fibonacci 0.618 retracement as projected on the daily chart.

The US dollar index has now carved a lower degree downswing between 104.88 and 101.93. Bulls will be inclined to produce a corrective rally in the near term pushing prices through 103.75 at least. We can expect prices to turn lower thereafter and proceed towards 99.00 and lower going forward.

Trading plan:

Potential short-term rally toward 103.75 against 101.80, then lower.

Good luck!