The US Dollar Index (DXY) has been capped at the 200-Day Moving Average (DMA) and 38.2% retracement of its fall from October at 106.15/62. Economists at Credit Suisse note that a retest of the 100.82 YTD low is on the cards.

Close above 200-DMA at 106.62 to warn of a more protracted phase of USD strength

“The DXY rally has been capped for from just ahead of the 38.2% retracement of the 2022/2023 fall and 200-DMA at 106.15/62 and our bias remains to view strength from January as corrective and we look for this to cap to define the top of a broader range.”

“A sustained close below the 55-DMA at 103.51 should add weight to our view but with a break below 102.59 still seen needed to clear the way for a retest of the 100.82 YTD low.”

“Should a close above the 200-DMA at 106.62 be seen this would warn of a more protracted phase of USD strength and a test of 107.80/99 next.”