The US Dollar Index has experienced a phase of rebound after forming a significant low near 99.50. Economists at Société Générale analyze DXY’s technical outlook.

Recent pivot low at 101.75/101.60 to be an important support zone

DXY is now probing the 200-DMA and close to July peak of 103.60. This could be a potential resistance. Failure to cross can result in an initial pullback towards a steeper ascending trend line near 102.70. 

Recent pivot low at 101.75/101.60 is expected to be an important support zone. Only if this gets violated would there be risk of a deeper down move. 

If the index establishes above 103.60, the bounce is likely to extend.