USD Index to extend its decline on a break under 105/104.60 – SocGen

US Dollar Index (DXY) has experienced a quick decline toward the 200-Day Moving Average at 105/104.60 which is also the low of August. A break below here would open up next potential supports at 103 and 101.90/30, analysts at Société Générale report.

110.00 is likely to remain an important hurdle

“Daily MACD is within deep negative territory denoting an overstretched move. An initial bounce is not ruled out towards 108.30, the 38.2% retracement from the high achieved in November.”

“The lower band of previous consolidation at 110.00 is likely to remain an important hurdle.”

“In case the index fails to hold 200DMA at 105/104.60, this would denote an extended down move. Next potential supports would be at 2020 peak of 103 and 101.90/101.30, the 50% retracement from 2021.”