FX.co ★ Trading plan for US dollar index on January 20, 2023

Technical outlook:

The US dollar index dropped through the 101.65 low before finding support again as the bulls prepare to come back in control. The index is seen to be trading close to 101.80 at this point in writing and is expected to push through the 102.40 initial resistance in the near term. Ideally, prices should stay above the 101.00 interim low carved early this week.

The US dollar index might have completed its larger-degree decline between 114.70 and 101.00. Prices have met the Fibonacci 1.618 extension around 102.22 and climbed by almost 100 points. If the above structure holds well, the bulls are expected to come back strong from here and push prices through 105.35 to confirm a potential trend reversal.

The US dollar index is preparing to rally against the 101.65 low according to the lower-degree wave structure. Prices are either preparing to rally through 106.50 and up to 109.50 or to push towards a new high above 114.70. Either way, the instrument is looking higher from here as long as the 101.00 support remains intact.

Trading idea:

Potential rally against 101.00

Good luck!