US Dollar Index to extend its race higher towards 99.75 – SocGen

The US Dollar Index (DXY) formed a base near the 89.50 level and the breakout has resulted in a steady uptrend. Economists at Société Générale expect the DXY to climb as high as the 99.75 mark.

Bullish outlook while above the 95.10/94.50 suppot zone

“On longer-term charts, the price action since 2017 appears to be evolving along two converging trend lines, which denotes the DXY is still within a wide range, with limits at 89.50/89.20 and 103.00. These will be pivotal levels.”

“Shorter-term, the index is seeing an initial pullback; however, a multi-month trend line near 95.10/94.50, which marks the 23.6% retracement of the uptrend since January 2021, is a potential support level. As long as this holds, a deeper downtrend is not envisaged.”

“Defending the 95.10/94.50 zone could result in continuation of the upward move towards 97.70 and perhaps even towards 99.75, which marks the 76.4% retracement from 2020.”