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

Technical outlook:

The US dollar index seems to be heading lower towards 107.00 and up to 105.50 before it completes its corrective drop. The correction began from 114.67 high and completed its first leg close to 109.50. Its second leg was a sharp corrective pullback towards 112.65 which was also the backside of its support-turned-resistance trend line.

The US dollar index faced strong resistance around 112.65 as expected and prices reversed lower straight through 109.70 early this week, marking the beginning of the last leg lower. Also, note that immediate support around 110.00 has been broken as well, hinting at a probable corrective rally before the index could resume lower again.

The trading instrument is now working on its recent downswing boundary between 112.65 and 109.70 levels as seen on the 4H chart here. The Fibonacci 0.618 retracement of the above drop is seen through the 111.60 mark as projected on the chart here. A highly probable bearish turn is expected to resume after prices reach 111.60 in the coming trading sessions.

Trading idea:

Potential drop towards 107.00 and 105.50 against 113.65

Good luck!