FX.co ★ Trading plan for US dollar index on August 31, 2022

and drag the price through the 104.30 initial support in the next few trading sessions. Only a break higher will delay matters further.

The US dollar index has carved a meaningful larger-degree upswing between 89.50 and 109.21 as seen on the daily chart here. The bears are now looking poised to retrace the upper border and drag prices through 101.00 at least, which is the Fibonacci 0.382 level of the above rally. The bulls might resume higher thereafter.

The trading instrument has also carved a strong bearish divergence on the daily RSI as prices climbed above 109.21 earlier this week. This is also a good indicator for a potential trend reversal, which could drag prices lower towards 104.30 at least. Only a break above 109.21 would delay matters further and bring back the bulls into play.

Trading plan:

Potential drop to 104.30 against 109.21

Good luck!