Weekly close below 104.00 should add to negative technical pressure – Scotiabank

The US Dollar Index (DXY) is mild lift on the day. Economists at Scotiabank analyze the index outlook.

Upside potential remains limited

The USD seems to be stretching its yield-based valuation somewhat and upside potential remains limited without new motivation for markets. 

There is a hint of USD vulnerability on the weekly DXY chart. The Index closed well off last week’s high, suggesting a rejection of the 61.8% retracement of the DXY’s Q4 decline (104.77). A lower close this week (below 104.00) should add to negative technical pressure on the USD generally.