US Dollar Index: Deeper downtrend possible if it breaks below 110/109.30 — SocGen

The uptrend of the Dollar Index (DXY) has stopped. However, only a break below the 110/109.30 area could lead to further losses, Société Générale economists report.

The 50 DMA zone at 110/109.30 is the short-term support.

“The rising trendline and 50 DMA near 110.00/109.30 is the first layer of short-term support.”

“The uptrend could resume once a break above the recent low high at 113.90 materializes. Beyond 113.90, the next potential hurdles lie at 117 and the 2001 high at 121/122.”

“It should be noted that the monthly RSI is at its best levels since 2015, which denotes an oversized move. This does not signal a reversal, however, a consolidation is not ruled out. Only if it crosses the 50 DMA near 110/109.30 there would be a risk of a deeper downtrend.”

Source: Fx Street

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