USD Index: Scope for a deeper downtrend on a break below 110/109.30 – SocGen

The US Dollar Index (DXY) uptrend has paused. Nevertheless, only a break under the 110/109.30 region could open up further losses, economists at Société Générale report.

50-DMA at 110/109.30 is short-term support

“Steep ascending trend line and 50-DMA near 110.00/109.30 is first layer of support near-term.”

“The uptrend could resume once a break above recent lower high at 113.90 materializes. Beyond 113.90, next potential hurdles are located at 117 and 2001 high of 121/122.”

“It is worth noting that monthly RSI is at its best levels since 2015 denoting an overstretched move. This doesn’t signal a reversal, however, a consolidation is not ruled out. Only if 50-DMA near 110/109.30 gets violated would there be a risk of a deeper downtrend.”