US Dollar Index (USDX) Analysis: Correction Near Completion as Bullish Momentum Targets New Highs

USDX Appears to Be Completing an ABC Correction

The US Dollar Index (USDX) is showing signs of completing its ABC corrective structure, with price likely finishing Wave (c) near a key Fibonacci support zone.

The current rebound suggests that buyers are stepping back into the market after the support area successfully held the recent decline.

Key Support Zone Remains the Foundation

The highlighted pink area represents a major support zone, where buying pressure has started to outweigh selling pressure.

As long as USDX remains above this support, the bullish outlook remains intact. The current price action also suggests the potential development of a new impulsive wave that could extend the broader uptrend.

Upside Targets Point Toward New Highs

If bullish momentum continues to build, the first upside objective is located around the 261.8% Fibonacci Extension, followed by a retest of the previous swing high.

A successful breakout above this resistance would confirm the continuation of the bullish trend and increase the probability of USDX establishing a new higher high.

Momentum Supports the Bullish Scenario

The Awesome Oscillator (AO) previously displayed convergence and is now showing the potential for a bullish divergence to develop.

If this divergence is confirmed alongside strengthening bullish momentum, it would provide additional evidence that the corrective phase has ended and a new bullish leg is underway.

Conclusion

USDX appears to have completed its ABC correction and is showing early signs of resuming its broader uptrend. As long as price remains above the key support zone, the bullish outlook remains favorable, with the potential to challenge previous highs and eventually establish new highs.