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08.01.202114:37 Forex Analysis & Reviews: Trading plan for US Dollar Index for January 08, 2021

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Technical outlook:

The US Dollar Index end of the day chart has been presented here which indicates a Morning Star candlestick pattern complete yesterday around 89.81 levels, hinting a potential trend reversal ahead. The spot prices today have registered an intraday high at 90.10 and the index is seen to be trading around 89.87 levels at this point in writing. Please note that the initial resistance has been taken out at 89.98 today and hence a pullback is natural. Bulls might be inclined to keep the correction in check above 89.20 levels, going forward.

Immediate resistance now is seen towards 90.40/50 while support should be strong around 89.20 levels respectively. A break above 90.40/50 would confirm that bulls are back in control and a meaningful bottom is in place at 89.20 levels respectively. Also it would open doors to rally towards 94.50 over the next several weeks to mark the first bullish reversal boundary before correcting lower again.

The overall structure since 103.00 highs also seems to be complete around 89.20 and bulls might remain poised to stay in control from here.

Trading plan:

Remain long, stop @ 88.00, target @ 94.50 and higher.

Good luck!

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