FX.co ★ Trading plan for US dollar index on May 24, 2023

Technical outlook:

The US dollar index has continued its rally as expected hitting fresh swing highs at 103.60 on Tuesday. The index is seen to be trading close to 103.00 at this point in writing and the slide could continue towards the 102.40-50 zone. Also, note that 102.40 is the previous immediate price support alongside the Fibonacci 0.382 retracement of the upswing between 100.80 and 103.60.

The US dollar index is currently working on the above upswing between 100.80 and 103.60 and could retrace lower up to 101.75 which is the Fibonacci 0.618 retracement of the above rally. The current pattern is a potential expanded flat correction, which is within its last lower wave. The above should drag the price below 102.56 at least to complete the pattern.

The US dollar index remains bullish against the 100.80 support and its medium-term target potential remains toward 104.50, 105.50, and higher. The recent corrective drop should be taken as yet another opportunity to open long positions. Furthermore, the 102.00 zone was previous resistance, which would act as support going forward.

Trading idea:

A potential rally to continue after correction towards the 102.40-60 zone.

Good luck!