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

Technical outlook:

The US dollar index dropped through the 103.35 lows during the early Asian session on Tuesday before pulling back sharply. The index is seen to be trading close to 114.15 at this point in writing as the bulls are looking to push through the 105.50 initial resistance. The index has tested the backside of its resistance trend line at 103.56, which acts as strong support now.

The US dollar index has rallied swiftly through the 104.50 high after printing a low close to 103.00 over the last week. Furthermore, the price has now taken out its initial resistance trendline and is trading into the buy zone. Ideally, the bulls should remain in control from here and push prices through 105.50, 107.00 and higher in the next few trading sessions.

The US dollar index has got enough momentum to push through 110.50 in the near to medium term. If prices break above 110.50, it could confirm further upside towards 114.70 and higher as the bulls remain in control. On the flip side, a bearish turn from 110.50 might indicate that the index is heading further downward below 103.00 going forward. It is looking higher from here in the near term though.

Trading idea:

Potential bullish turn against 102.00

Good luck!