US Dollar Index might be preparing to push higher towards 92.00 mark

Technical Analysis:

US Dollar Index seems to be preparing to resume its rally towards 92.00 levels in the near term. Furthermore, bulls remain poised to push through 95.00/96.00 levels thereafter. Bottom line remains around 89.20/50 mark, which should hold.

The index had dropped through $89.20 lows on January 06 2021. Since then, bulls managed to produce a religious rally towards 93.40/45 levels, which is marked as Wave (1) on the 4H chart presented here. Bears took over control thereafter and dragged lower.

The drop might be seen as corrective, labelled as A-B-C, where Wave C unfolded as an ending diagonal terminating around 89.50/55 mark. It is labelled as potential Wave (2) corrective drop here. If the above proposed structure holds, Wave (3) rally should resume soon.

Also note at the index has rallied through 90.45 levels after having dropped to 89.50/55 levels earlier. It seems possible that lower degree Waves (1) and (2) might be in place around 90.45 and 89/83 levels respectively.

If the above structure holds well, US Dollar Index is expected to resume its rally towards 92.00 levels at least over the near term. Most traders might want to remain long from here with risk below 89.20 levels respectively.

Prepared by

Finacademy Technical Team