FX.co ★ Technical analysis on the Dollar index for January 20th, 2023.

Violet lines- Fibonacci retracements

Black line- bullish RSI divergence

The Dollar index is trading around 102. Price has stopped the decline at the 50% Fibonacci retracement of the entire rise from the 89-90 base to the 114.70 highs. Technically short-term trend remains bearish. The RSI is providing bullish divergence signals in the Daily chart but this is not enough. Price must start a sequence of higher highs and higher lows in order for bulls to hope for a bigger reversal. So far price continues making lower lows and lower highs. Next major support is found at the 61.8% Fibonacci level. However before moving towards that level, at least a short-term bounce is expected.