Credit Suisse analysts discuss the technical outlook of the Dollar Index (DXY).
Looking for an eventual test of key resistance at 105.68/106.13
The DXY Index continues to appreciate at a steady pace after completing a short-term base above the 55-day SMA and April high, in turn supported by repeated successful defense of its January yearly low at 100.82. We are also now seeing a series of breakouts of the major levels via a series of USD crosses and with the daily and weekly momentum positive, We stand by our view that the potential for a large and large “double bottom” continues to increase markedly.
We continue to look for strength to return to the March highs, the 200-day SMA and the 38.2% retracement of the 2022/2023 dip at 105.63/106.13. Above here though, a “double bottom” reversal needs to be confirmed to open the door for a more sustained and material phase of USD strength, with next resistance at 107.78/99.
Support is initially at 103.88, below which there may be a retracement to the 13-day exponential moving average 103.25. However, with 102.96 support not far away, we would look for a good bottom in this area.
Source: Fx Street
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