05.01.202307:56 Forex Analysis & Reviews: Trading plan for US dollar index on January 05, 2023

Technical outlook:

The US dollar index is forming a potential low around the 103.50-60 zone after reversing from 104.50 early this week. The index is seen to be trading close to 104.00 at this point in writing as the bulls are looking poised to come back in control. Prices are expected to rally towards 105.50 and to 107.00 in the near term. The 103.00-05 handle should remain intact for the bullish outlook to hold.

The US dollar index seems to have terminated its larger-degree corrective drop, which began from the 114.70 highs earlier to 103.05 recently. Furthermore, a higher high has also been carved around 103.12 last week of December 2022. A high probability remains for a continued rally from here towards 107.00 and up to the 110.00-50 zone at the most.

The US dollar index has further unfolded its lower-degree upswing between 103.12 and 104.50 respectively. The drop to 103.50-60 thereafter is seen as a retracement/pullback, which looks complete. If the above structure holds well, the next move should be higher towards 105.50 and 107.00 in the near term. We will review the trend around 107.00 and decide on the next move.

Trading idea:

Potential rally towards 107.00 against 102.00

Good luck!