US Dollar Index: Risk of a deeper pullback on a break below 106 – SocGen

The US Dollar Index up move petered out after achieving upside projections near 111 which is also the low of September 2001. Economists at Société Générale expect DXY to sustain further losses on a dip under 106.

Initial resistance aligns at 109.30

“Lower limit of the ascending channel since February at 106 is near-term support. Daily RSI is also approaching the lower band of its bullish territory which denotes 106 could be an important level. Only if the index fails to defend this support, there could be a risk of a deeper pullback towards August low of 104.60/103.80.” 

“First hurdle is at 109.30.”