FX.co ★ Trading plan for US dollar index on June 20, 2022

Technical outlook:

The US dollar index rallied through 104.85 on Friday before finding resistance and pulling over. The index is seen to be trading at around 104.15 at this point in writing and is expected to resume lower towards 99.00 in the next few trading sessions. The bears will remain inclined to hold prices below the 105.52 highs registered last week.

The US dollar index is potentially carving a larger degree corrective wave since printing the 104.88 highs. The index is expected to drop through the 99.00 levels before finding support and turning higher again. Also, note that the 99.00 mark is close to the Fibonacci 0.382 retracement level of the entire previous rally between 89.50 and 104.88 levels respectively.

A high probability remains for prices to resume a rally after carving a potential higher low around the 99.00 levels. Please note that the one trend line support is also passing close to 99.00, which should help provide the necessary bounce. It is vital for prices to stay below 105.52 for the above structure to hold well.

Trading plan:

Potential drop towards 99.00 against 106.00

Good luck!