US Dollar Index Price Analysis: Rally now expected to test 109.00

• DXY resumes the upside with strong conviction on Thursday.
• The index surpasses the December 2002 top at 108.74.

DXY rapidly leaves behind the weakness seen in the last couple of sessions and resumes the upside to new cycle highs near 108.80 on Thursday.

Further upside in the dollar remains in store in the short-term horizon. That said, once the 2022 high is cleared, the index could attempt a move to the round level at 109.00 ahead of the September 2002 top at 109.77 (September 16).

As long as the index trades above the 5-month line near 103.15, the near-term outlook for DXY should remain constructive.

In addition, the broader bullish view remains in place while above the 200-day SMA at 98.73.

Of note, however, is that the index trades well into the overbought territory and it therefore could trigger a corrective decline in the not-so-distant future.

DXY daily chart