US Dollar Index: Defending 107.60 is crucial to avert a phase of decline – SocGen

The US Dollar Index (DXY) extends its decline to 111.00. Holding above 107.60 is critical to avoid a deeper fall, economists at Société Générale report.

Uptrend is slowly becoming overstretched

“A pullback is underway, however, 110.80/110.40, the 61.8% retracement of the last bout of up move is expected to be first layer of support.” 

“Beyond 114.80, next potential hurdles are located at 117 and graphical levels of 121 consisting of 2001/2002 peaks.”

“It is worth noting that monthly RSI is at the best levels since 2015. This denotes the uptrend is slowly becoming overstretched.”

“Daily channel band at 107.60 is an important level. Defending this would be crucial to avert a phase of decline.”