US Dollar Index (DXY) – a return of the bulls?

From a chart-technical point of view, the index stabilized at a large support cluster in the 101,000–100,000 range. This is where a horizontal support line has run for several years, leading to rallies on several occasions.

Our main scenario is another significant rebound of the USD to the north, which could take the index to 103,500 in the short term. Beyond that, we expect that in the bullish best-case scenario, a run at 105,500 is possible. This is where the falling trend line of the last few highs runs.

However, if the horizontal resistance at 100,000 is given up sustainably (on a monthly closing price basis), it can lead to long-term and significant USD weakness. However, this is currently our secondary scenario.

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