USD Index Price Analysis: Downside alleviated above 102.60

• DXY extends the three-week rally north of 102.00.
• Sustained gains are expected on a close above 102.60.

DXY advances for the fourth session in a row and reaches fresh three-week highs in the 102.35/40 band on Tuesday.

The index appears poised to extend the ongoing multi-week recovery for the time being. Against that, the surpass of the weekly top of 102.36 (August 1) should prompt the index to embark on a probable visit to the transitory 100-day and 55-day SMAs at 102.39 and 102.56, respectively.

Once the latter is cleared, it should alleviate the downside bias in the dollar and allow for extra gains.

Looking at the broader picture, while below the 200-day SMA at 103.69 the outlook for the index is expected to remain negative.

DXY daily chart