Home Forex Next on the downside is 107.60

Next on the downside is 107.60

by SuperiorInvest
  • DXY adds to weekly decline and returns to 108.40/35 band.
  • A deeper drop to the 107.60 area should not be ruled out.

DXY it is intensifying the weekly retracement and will break below the key 109.00 support with some conviction on Friday.

Despite the corrective decline, the underlying bullish view of the dollar remains unchanged. However, the index could allow a deeper decline to the initial weekly low of 107.58 (August 26). The proximity of the temporary 55-day SMA, today at 107.17, also reinforces this support zone.

Meanwhile, the short-term constructive outlook remains bolstered by the 7-month support just below 106.00.

Looking at the longer-term scenario, the dollar’s bullish outlook remains in place while above the 200-day SMA at 101.33.

DXY daily chart

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