USD Index: In vicinity to crucial support, initial bounce is not ruled out towards 108.30 – SocGen

The US Dollar Index stopped just short of testing the 200-Day Moving Average at 105. Rebound towards 108.30 could follow, economists at Société Générale report.

Failure to hold 200DMA at 105/104.60 would denote an extended down move

“Daily MACD is within deep negative territory denoting an overstretched move.”

“An initial bounce is not ruled out towards 108.30, the 38.2% retracement from the high achieved in November.”

“The lower band of previous consolidation at 110.00 is likely to remain an important hurdle.”

“In case the index fails to hold 200DMA at 105/104.60, this would denote an extended down move. Next potential supports would be at 2020 peak of 103 and 101.90/101.30, the 50% retracement from 2021.”