12.07.202312:42 Forex Analysis & Reviews: Trading plan for US dollar index on July 12, 2023

Technical outlook:

The US dollar index slipped through the 100.90 lows intraday on Wednesday before finding some bids coming in. The index is seen to be trading close to the 101.05 level at this point in writing as the bulls prepare to come back in control soon. They are poised to push prices higher towards the 103.30-40 zone before giving in to the bears again. A break above 101.50 will confirm a bottom is in place.

The US dollar index has found support ahead of 100.60 which has held prices higher throughout the triangle consolidation. As marked on the 4H chart here, prices have terminated potential Wave D just below 101.00 and last Wave E should resume higher anytime soon. Only a break below 100.60 will confirm that the triangle was complete at 103.20 earlier.

Alternatively, the US dollar index will at least produce a corrective rally towards 102.50 before turning lower again. Please note that 102.50 is also the Fibonacci 0.618 retracement of the entire drop between 103.20 and 100.90. In case wave E higher or after a corrective move, the instrument is looking higher from here.

Trading idea:

A potential rally towards 103.30 to resume soon

Good luck!