FX.co ★ Trading plan for USD index on February 28, 2023

Technical outlook:

The US dollar index dropped through 104.24 lows intraday on Monday before finding bids again. The index is seen to be trading close to the 104.45 mark at this point in writing as bears prepare to drag further toward 104.00 levels in the near term. Intraday resistance could be seen close to the 104.55-60 zone for bears to be back in control.

The US dollar index is broadly unfolding a larger degree corrective rally since hitting 100.50 lows early in February. The index might have terminated its first wave close to 105.00 over the last week and could be preparing for a corrective pullback toward 102.50 at least. We can expect the final wave to go higher toward 106.50 and further thereafter.

The US dollar index is facing immediate resistance at 105.35; while support comes in around 103.40, followed by 102.40 levels respectively. A continued drop towards 104.00 will add further confidence to the fact that Wave B is progressing. On the flip side, if prices push beyond 105.35 from here, it could open the door toward 106.50 sooner than expected.

Trading plan:

Potential drop to 102.50 near term then rally resumes.

Good luck!