Technical outlook:

The US dollar index dropped to the 101.25 lows during the early trading hours on Wednesday after hitting a high close to 102.00 on Tuesday. The index is seen to be trading close to 101.30 at this point in writing as the bulls prepare to push the price higher through 102.50 and 104.00 levels in the short term. Ideally, prices should stay above the 100.30 lows to keep the bullish structure intact.

The US dollar index is progressing within the last leg rally of a larger-degree corrective wave, which began from the 100.50 lows earlier. A complex correction is potentially unfolding with a target above 105.50 in the next few weeks. Also, note that the earlier downswing between 114.70 and 100.50 is being retraced and prices could reach up to 108.00 before the bears are back in control.

The US dollar index has further carved a lower-degree upswing between 100.57 and 101.97. The index is currently retracing in the same way and could find support around 100.85 which is also the Fibonacci 0.618 retracement as seen on the chart here. We expect a bullish reaction if prices manage to reach there intraday.

Trading idea:

A potential rally against 100.30

Good luck!